®y 


r  frail 


M  M^W 


SINGLE   AND    D     ,i3LE    ENTRY, 

COMMERCIAL  CALCULATE        AND  THE  PHILOSOPHY 
UC-NRLF 


i-n.d  put  all  in  writing  *bftti 
tclesiastious  xlii.  7. 


BY  IRA  MAIHEV,  A.  M., 

AUTHOR  OF  "  MEANS  A>T>  ENDS  OF  CN1VEB8AL  EDUCAUCJS.'1 

BOSTON: 
NICHOLS    &    HALL, 

82  BBOM^ELD  STBEET. 


cn 
>- 


BOSTON: 
NICHOLS  &  HALL. 


EMBRACING 


SINGLE    AND    DOUBLE    ENTET, 

COMMERCIAL  CALCULATIONS,  AND  THE  PHILOSOPHr 
AND  MORALS  OF  BUSINESS. 


*D«lJv«r  all  things  in  number  and  weight,  and  put  all  In  writing 
thou  givest  out  or  receivest  in."    Ecclesiasticus  zlii.  7. 


BY  IRA  MAYHE¥,  A.  M., 

AUTHOR  OF  "MSAN8  AND  ENDS  OF  UNIVXB8AJL  EDUCATION." 

BOSTON: 
NICHOLS   AND    HALL, 

82  BROMBTELD   STREET. 


V     OF  THE     '      X 

UNIVERSITY   J 


ACCOUNT  BOOKS. 

A  SET  of  Account  Books  has  been  prepared  expressly  to  accompany 
this  volume,  of  sufficient  size  and  properly  ruled  for  writing  up  all  the 
Examples  for  Practice  it  contains,  consisting  of 

I.  A  LEDGER  FOB  THE  FIRST  FORM  OF  ACCOUNTS.     One  Book. 
II.  A  LEDGER  FOR  THE  SECOND  FORM  OF  ACCOUNTS.    One  Book. 
HI.  A  DAY  BOOK  AND  LEDGER  FOR  THE  THIRD  FORM  OF  AC- 
COUNTS.   Two  Books. 

IV.  A  JOURNAL  AND  LEDGER  FOR  DOUBLE  ENTRY.    Two  Books. 
These  Account  Books  cost  but  little  more  than  common  paper. 


KEY    TO    BOOK-KEEPING. 

A  KEY  to  this  Book-keeping  has  been  prepared,  in  which  all  the 
Examples  for  Practice  occurring  in  the  Book-keeping  are  carefully 
written  out,  and  in  which  the  more  difficult  of  the  Commercial  Cal- 
culations are  made.  The  Key  will  be  of  advantage  to  Teachers  in 
testing  the  accuracy  of  the  work  of  classes,  and  may  be  of  service  to 
the  private  learner. 


Entered  according  to  Act  of  Congress,  in  the  year  1851, 

BY    IRA    MAYHEW, 
In  the  Clerk's  Office  of  the  District  Court  of  the  District  of  Michigan. 

Entered  according  to  Act  of  Congress,  in  the  year  1860, 

BY    IRA    MAYHEW, 
In  the  Clerk's  Office  of  the  District  Court  of  the  District  of  Michigam. 


PKIKTED  BT 
OKO.     C.     BAND     &     A  V  E  K  T» 


ELECTROTYPED  AT  THB 

BOSTON  STEREOTYPE  FOUNDRY. 


PROM  PREFACE  TO  FIRST  EDITION. 

AGESILAUS,  king  of  Sparta,  being  asked  what  things  h« 
thought  most  proper  for  boys  to  learn,  very  appropriately  re« 
plied,  "  Those  things  which  they  should  practice  when  they  be- 
come men."  Ever  since  it  was  said  to  Adam,  "  In  the  sweat  of 
thy  face  shalt  thou  eat  bread,"  there  has  been  a  necessity  laid 
upon  man  not  only  to  labor,  but  to  EXCHANGE  with  others  the 
products  of  his  industry,  in  order  to  obtain  a  comfortable  sup- 
port. "  Deliver  all  things  in  number  and  weight,  and  put  all 
in  writing  that  thou  givest  out  or  receivest  in,"  is  a  precept  of 
universal  application  ;  and  there  is  a  special  necessity  for  its 
observance  in  all  business  transactions  between  debtor  and 
creditor.  .  .  .  Considerations  are  presented  in  the  Introduc- 
tion to  show  some  of  the  many  advantages  that  would  result 
to  individuals  and  to  the  community  from  making  Book- 
keeping a  common  study  in  all  our  schools.  .  .  . 


PREFACE  TO  THE  SIXTIETH  EDITION. 

Since  the  first  publication  of  this  work,  in  1851,  the  author 
and  publishers  have  received  many  te"'_Aaonials  in  its  favor, 
the  strongest  and  most  cordial  of  which  have  been  from  teach- 
ers who  have  used  it.  These  testimonials  are  from  public  and 
private  school  teachers,  from  the  principals  and  teachers  of 
academies  and  ladies'  seminaries,  from  professors  and  teachers 
in  state  normal  schools,  from  presidents  and  professors  of  col- 
leges, both  literary  and  commercial,  and  from  city  and  state 
superintendents  of  schools,  to  whom — and  especially  to  a  few 
who  have  kindly  suggested  slight  modifications  in  the  text  — 
the  author  would  render  grateful  acknowledgments. 

The  present  Revised  Edition  it  is  hoped  will  be  found 
more  worthy  of  patronage.  Part  Second  and  Part  Third 
are  entirely  new.  IBA  MAYHEW. 

ALBION,   MICH.,  1860. 

1*  6 

— — 


CONTENTS. 


PAGE 

Remarks  to  the  Student.     .    .  7 

Abbreviations  and  Signs.    .    .  8 

Suggestions  to  Teachers.    .    .  9 

Introduction 10-18 

PART  FIRST. 

GENERAL  BOOK-KEEPING. 

Debtor  and  Creditor.  ....          19 

Transaction  defined 20 

Account  Books 24 

First  Form  of  Accounts.     .    .  24 

The  Ledger 24 

The  Index 26 

Illustrative  Examples.    .    .    .      28-39 

Cash  Account 40-41 

Kules  for  Dr.  and  Cr.  Entries.          46 

Bills  of  Parcels 46-47 

Accounts  Current. .....      48-49 

Bills  Receivable 50-53 

Bills  Payable 50-53 

General  Settlement 54 

Memorandum  Book.  ....  55-59 
Examples  for  Practice.  .  .  .  60-71 
Second  Form  of  Accounts.  .  72 

Illustrative  Example,      ...  73 

Accounts  Current 74-76 

Examples  for  Practice.  .  .  .  77-85 
Third  Form  of  Accounts.  .  .  86-89 
Illustrative  Example.  .  .  .  90-103 
Retrospect  and  Prospect.  .  .  104 
Examples  for  Practice.  .  .  .  105-121 

Auxiliary  Books 122-124 

Books  of  Account 125 

Notes,  Orders,  and  Receipts.  .  125-127 
Checks,  Drafts,  &  Bills  of  Ex.  127-131 

PART  SECOND. 

COMMERCIAL  CALCULATIONS. 

Percentage 132 

Interest 133 

Partial  Payments 134 

Computation  of  Time.  ...  135 
Discount 135-136 


Bank  Discount 

Exchange 138-140 

Cornmis.,  Insurance,  &  Duties.  140 
Equation  of  Payments.  .  .  .  141-146 
Storage,  Dividends,  &  Losses.  147 
Partnerships 147 

PART  THIRD. 

PHILOSOPHY  &  MORALS  OF  BUSINESS. 

Choice  of  Business 148 

Labor  the  Source  of  Wealth  .  151 
How  Labor  most  Productive.  152 
Benefits  from  Exchanges.  .  .  154 
How  Merchants  ave  Useful.  .  155 
How  Money  facilitates  Exch's.  156 
Of  Banks  and  Banking.  .  .  .  157 

Banks  of  Deposit 158-162 

Banks  of  Discount 162-164 

Savings  Banks 164 

Banks  of  Circulation 164 

Quality  and  Functions  of  Money.      165 

Commercial  Banks 167 

State  Banks 168 

Private  Banks. 169 

Recapitulation 169-171 

PART   FOURTH. 

DOUBLE  ENTRY  BOOK-KEEPING. 

Definition  of  Books  used.    .    .         15-3 

Rules  for  Journalizing.  .    .    .  174-175 

Classes  of  Accounts 175 

Titles  of  Accounts 176-177 

Posting  Books 177 

Trial  Balance 178 

Balancing  Accounts 179-182 

Diagram  for  Closing  Ledger.  183 
Fourth  Form  of  Accounts.  .  185 
Illustrative  Example.  .  .  .  185-197 
Examples  for  Practice.  .  .  .  198-213 
Fifth  Form  of  Accounts.  .  .  214 
Illustrative  Example.  .  .  .  214-218 
Sixth  Form  of  Accounts.  .  .  219 
Illustrative  Example.  .  .  .  219-223 


TO  THE  STUDENT. 


From  an  attentive  perusal  of  the  following  Introduction, 
you  will  see  some  of  the  many  benefits  resulting  to  persona 
engaged  in  the  various  departments  of  productive  industry, 
from  the  study  and  practice  of  Book-keeping.  Others  will 
present  themse7  /es  to  your  mind  in  your  progress  through  the 
book.  While  you  can  gain  nothing  by  leaving  a  subject  imper- 
fectly understood,  you  will  lose  much.  You  should  hence  let  it 
be  a  settled  rule  with  you  never  to  proceed  onward  while  any 
thing  remains  unconquered  behind.  In  order,  then,  to  facili- 
tate your  progress  in  this  important  study,  and  to  render  it  of 
the  greatest  practical  utility,  you  will  do  well  constantly  to  bear 
in  mind  the  following  suggestions,  until  you  shall  have  formed 
correct  habits  in  relation  to  the  several  particulars  named :  — 

1.  Make  every  arithmetical  calculation  yourself,  as  you  pro- 
ceed.   Rely  not  upon  any  result  stated  in  the  book,  until  you 
have  first  made  the  computation  on  which  it  depends  ;  other- 
wise, although  the  author  may  have  derived  some  discipline 
from  its  preparation,  you  certainly  will  gain  little  from  its 
perusal.     What  is  worth  doing  at  all,  is  worth  doing  well. 

2.  In  solving  the  Examples  for  Practice,  exercise  your 
common  sense  in  determining  how  each  transaction  is  to  be 
entered ;  whether  all  on  one  side  of  the  account,  and  if  so,  on 
which  ;  or  a  part  on  one  side  of  the  account  and  a  part  on  the 
other.     Bear  in  mind,  also,  that  a  transaction  will  sometimes 
require  an  entry  to  each  of  several  accounts. 

3.  Spell  every  word  correctly,  and  write  neatly  and  legibly. 

4.  Study  brevity  and   perspicuity  in  recording  business 
transactions,  and  in  all  your  business  correspondence. 

5.  Accuracy  in  accounts  is  a  cardinal  virtue.    It  is  less  diffi? 
cult  to  fall  into  errors  than  to  correct  them.     Therefore, 

6.  Exercise  all  diligence  to  keep  your  Account  Books  neat 
legible,  promptly  written  up,  and  free  from  errors. 


ABBREVIATIONS  AND  SIGNS. 


JLcct Account. 

Jant.  .^.  .  .  Amount. 

Ans Answer. 

Apr April. 

Aug August. 

B.  orJBJfc. .  .Bank. 

Bal Balance. 

BU Barrel. 

B  B Bill  Book,  or  Bank  Book. 

B.  P..  .  .  .  Bills  Payable. 
.B.  R  .  .  .  .  Bills  Receivable. 
Bush Bushel. 

C.  or  Ct.  .  .  Cent. 
Cash Cashier. 

C.  B Cash  Book. 

Cent (Centum)  A  hundred. 

CUe Clerk. 

Co Company. 

Cr Creditor. 

Cwt Hundred  Weight. 

D.ord. .  .  .Day. 

D.  B Day  Book. 

Dec December. 

Dis Discount. 

Do (Ditto)  The  Same. 

Dolls.    .  .  .  Dollars. 

Doz Dozen. 

D.P..  .  .  .  Day  Book  Page. 
Dr Debtor. 

E.  E. .  .  .  .  Errors  Excepted. 

E.  and  O.  E.  Errors    and    Omissions 

Ex Example.        [Excepted. 

Exs Expenses. 

Fav Favor. 

Feb February. 

Frt Freight. 

Ft Foot,  or  Feet. 

Gal Gallon. 

ffdkf. ....  Handkerchief. 

ffhd Hogshead. 

Bund.   .  .  .  Hundred. 
/.  or  Inv. .  .  Invoice. 

/.  B Invoice  Book. 

i.  e That  is. 

fns Insurance. 

Jnt Interest. 

Invt Inventory. 


.  P.  .  •  .  .  Jonrnal  Page. 
Jan.   ....  January. 
L.  F. .  .  .  .  Ledger  Folia 
M.  or  mo. .  .  Month. 

Mar March. 

Mdse Merchandise. 

No Number. 

Nov November. 

Oct October. 

P.  or  p..  .  .  Page. 

Payt Payment. 

Pd Paid. 

PTcg Package. 

Perorpr.   .  By  the. 
Per  an. .  .  .  By  the  year. 
P  and  L. .  .  Profit  and  Losa- 

Pr Pair. 

Prem.    .  .  .  Premium. 

Ps Piece,  or  Pieces* 

Pres President. 

Prin Principal. 

S.  B Sales  Book. 

Sec Secretary. 

Sept September. 

Stg Sterling. 

Snnds.  •  •  .  Sundries. 

TV Transaction. 

Viz To  wit  j  namely. 

Y.  or  yr.  .  .  Year. 
Yds Yards. 

+,plus.  .  .Addition. 
— ,  minus  .  .  Subtraction. 
=,  equal  .  .  Equality. 
X,into.  .  .Multiplication. 
-T-,  by  .  .  .  .  Division. 

:  is  to,).  .  Proportion. 

:  •  as,    |  .  .  3  :  12  :  :  5  :  20. 

$ Dollars. 

£J Cents. 

£ Pounds  Sterling. 

@ At,  or  to. 

% Per  cent. 

" The  same. 

li One  and  1-quarter. 

12 One  and  1-half. 

is One  and  3-quarterB. 


SUGGESTIONS  TO  TEACHERS. 


BOOK-KEEPING  has  not  heretofore  been  a  common  branch 
of  study  in  our  schools,  and  teachers  introducing  it  will  hence 
often  have  occasion  to  instruct  classes  in  what  they  have  not 
themselves  been  taught.  But  this  work,  which  has  been  pre- 
pared with  reference  thereto,  and  which  assumes  nothing  as 
known  that  is  not  taught,  while  simple  and  progressive,  is 
yet  practical  and  thorough.  Great  care  has  been  taken  to 
render  the  more  difficult  parts  of  the  science  clear  and 
intelligible.  Teachers  of  capacity  and  industry  may  hence 
as  readily  prepare  themselves  for  giving  instruction  in  it, 
with  entire  success,  as  in  any  other  branch  of  study. 

The  accompanying  Account  Books  have  been  prepared 
with  proper  rulings,  and  of  sufficient  capacity  for  writing  up 
the  Examples  for  Practice  in  the  various  forms  of  account, 
introduced  on  pp.  60,  77,  105,  and  198.  The  Illustrative 
Examples  which  precede,  may  be  worked  out  on  separate 
sheets  of  paper,  ruled  by  the  pupil  as  the  several  forms 
require.  It  will  be  well,  also,  for  the  learner  thus  to  work 
out  the  Examples  for  Practice  in  the  different  forms  of  ac- 
count, before  entering  them  in  the  Account  Books. 

Although  Keys  are  not  generally  desirable,  still,  in  works 
constructed  like  this  they  seem  unavoidable.  The  Key  to 
this  treatise,  which  contains  the  writing  up  of  all  the  Ex- 
amples for  Practice  introduced  into  the  book,  with  the  solu- 
tion of  the  more  difficult  examples  in  Commercial  Calcula- 
tions, will  enable  teachers  who  might  otherwise  shrink  from 
the  undertaking,  to  study  and  teach  this  important  science 
vith  great  satisfaction,  both  to  themselves  and  to  their 
pupils  and  patrons. 


INTRODUCTION. 


ARTICLE  1.  BOOK-KEEPING,  which  is  the  art  of  keeping 
accounts  in  such  a  manner  that  a  person  may  at  any  time 
know  the  true  state  of  his  business,  is  necessary  for  every 
person  engaged  in  the  ordinary  pursuits  of  life  —  for  the  day- 
laborer,  the  farmer,  and  the  mechanic,  as  well  as  for  profes- 
sional men,  and  persons  engaged  in  mercantile  and  commer- 
cial pursuits. 

2.  "Were  persons  generally  to  keep  correct  accounts,  they 
would  be  less  likely  to  run  into  debt  beyond  their  ability  to 
pay ;  temptations  to  dishonesty  would  be  diminished ;  there 
would  be  far  less  litigation  among  neighbors  and  those  who 
have  occasion  to  transact  business  with  one  another ;  habits 
of  industry,  frugality,  and  integrity  would  become  more  gen- 
eral ;  and  in  these  and  various  other  ways  the  social  and 
moral  virtues  would  be  cultivated,  and  individuals  generally, 
composing  the  community,  would  become  more  fraternal  and 
humane. 

3.  As  an  illustration  of  the  moral  benefits  that  would 
result  from  keeping  an  exact  account  of  one's  personal  ex- 
penses, it  is  sufficient  to  refer  to  the  fact  that  individuals 
sometimes  excuse  themselves  from  keeping  such  an  account, 
by  saying  it  is  not  always  pleasant   to    see,  afterward,  for 
what  they  have  foolishly  paid  their  money.     This  is  doubt- 
less true  of  more  persons  than  have  the  frankness  to  make 
the  confession.     Others  are  unwilling  to  let  their  books  show 


QUEST.  1.  What  is  Book-keeping  ?  For  whom  is  it  necessary  ?  — 2.  What  bene- 
fits result  from  keeping  correct  accounts?  —  3.  What  moral  benefits?  Who  need 
the  restraints  of  Book-keeping  ?  Where,  then,  should  it  be  studied,  and  by  whom  Z 

10 


INTRODUCTION. 


how,  or  for  what,  money  or  property  has  come  into  their 
possession.  It  can  hardly  be  set  down  as  uncharitable  to 
infer  that  such  love  darkness  rather  than  light,  because  their 
deeds  are  evil,  and  fear  the  light  of  correct  entries,  lest  their 
deeds  should  be  reproved.  It  must  be  apparent  to  every 
one,  that  all  such  persons  need  the  restraints  imposed  by 
keeping  an  exact  account  of  receipts  and  disbursements. 
Book-keeping,  then,  should  be  studied  in  every  common 
school  in  the  country,  (as  well  as  in  all  our  higher  seminaries 
of  learning,)  by  young  persons  of  both  sexes. 

4.  Heretofore   Book-keeping    has   rarely   been   studied, 
txcept  by  young  men  who  have  expected  to  engage  in  mer- 
cantile and  commercial  pursuits.     But  were  it  understood 
and  practiced  by  women  as  well  as  by  men,  it  would  in  many 
cases  (and  very  properly  too)  render  them  more  frugal  in 
their  personal  and  domestic  expenses ;  prevent  vast  accumu- 
lations of  indebtedness ;    diminish  greatly  the  number  of 
bankruptcies  in  the  country ;  and  secure  to  families  generally 
the  benefits  resulting  from  living  within   their   means.     It 
would,  moreover,  exert  a  healthful  influence  upon  the  mind, 
and  afford  rational  employment  for  many  upon  whom  time 
hangs  heavily,  or  is  worse  than  thrown  away  in  idleness  and 
thoughtless  dissipation. 

5.  While  upon  the  husband,  father,  or  brother,  rests  the 
duty  of  providing   for  the   necessities,  comforts,  and   con- 
veniences of  the  family — upon  the  wife,  daughter,  or  sister, 
devolves  the  scarcely  less   responsible  office  of  judiciously 
expending  the  means  furnished,  in  so  far  at  least  as  the  well' 
being  of  the  household  requires.     This  is  by  common  con- 
sent regarded  as  coming  within  her  appropriate  sphere.     It 
is,  then,  properly  a  part  of  the  housewife's  business  to  keep 
an  account  of  all  moneys  expended  by  her  for  the  benefit  of 

QUEST.  4.    What  benefits  would  result  to  women  and  families  from  this  study  I 
—  5.  State  benefits  at  length,  from  keeping  household  accounts. 

11 


INTRODUCTION. 


the  family,  or  on  its  behalf.  When  she  does  this,  she  becomes 
more  fully  a  helpmeet  for  man,  than  it  is  possible  for  her 
otherwise  to  be.  Domestic  broils  and  family  feuds  not  un- 
frequently  result,  either  from  real  or  supposed  scanty  pro- 
vision on  the  part  of  the  husband,  or  from  alleged  extrava- 
gance on  the  part  of  the  wife.  In  case  an  account  of  the 
family  expenses  is  kept  as  here  suggested,  the  wife  can  at 
any  time  render  an  account  for  all  moneys  that  have  passed 
through  her  hands.  Where  the  husband  keeps  a  proper 
account  of  his  business,  it  is  hence  easy  to  see  when  it  may 
become  necessary  to  curtail  expenses  in  order  to  live  within 
their  means.  It  is  evident,  moreover,  that  under  such  cir- 
cumstances two  whose  destinies  are  united  for  life,  can  more 
rationally  confer  together  in  relation  to  the  well-being  of  the 
household,  than  where  no  such  accounts  are  kept.  I  may 
here  also  venture  one  additional  suggestion  intimately  con- 
nected with  the  preceding. 

6.  The  wife  or  daughter  might,  in  many  instances,  very 
properly  keep  the  books  of  the  husband  or  father,  whose 
time  is  absorbed  in  the  pursuits  of  a  laborious  profession, 
and  thus  not  only  save  the  expense  of  a  clerk,  but  transact 
the  business  of  the  household  more  satisfactorily,  and  have 
the  pleasure  of  contributing  to  the  comfort  and  happiness  of 
the  family,  as  well  as  to  its  pecuniary  interests.  Woman, 
when  not  otherwise  employed,  may  also  properly  enter  the 
counting-room,  and  engage  with  father  and  brothers  in  its 
quiet  duties,  for  the  discharge  of  which  she  is  as  well  fitted 
by  nature  as  they.  She  thus  acquires  a  knowledge  of  busk 
ness,  and  if  bereft  of  husband  or  father,  upon  whom  too 
many  females  are  entirely  dependent  for  support,  she  may  be 
enabled  herself  to  conduct  the  business  advantageously,  or 
to  close  it  without  loss. 


QUEST.  6.     How  may  women  aid  in  business  by  keeping  books?    What  of  woman 
In  the  counting-room  ?     May  she  learn  to  conduct  a  business  herself? 

12 


INTRODUCTION. 


7.  Females,  as  heretofore  generally  educated,  have  been 
quite  too  dependent  for  a  support  upon  their  male  relatives 
and  friends,  if  such  they  chance  to  have.  Frequently,  too 
frequently,  alas !  there  is  exhibited  the  painful  spectacle  of 
the  widow,  bereft  of  him  to  whom  she  has  been  accustomed 
to  look  for  support  and  the  maintenance  of  her  little  ones, 
without  any  knowledge  of  the  ordinary  forms  of  business, 
and  hence  not  only  without  the  means  of  procuring  a  com- 
petency for  herself  and  children,  but  unable  advantageously 
to  assume  the  charge  of  any  property  she  may  chance  to 
possess.  Under  such  circumstances,  few  females,  compara- 
tively, are  prepared  properly  to  conduct  their  own  business. 
Losses,  embarrassments,  poverty,  and  not  unfrequently  the 
painful  sense  of  dependence  upon  the  cold  charities  of  an 
unfeeling  world,  hasten  those  thus  situated,  who  but  yester- 
day were  confiding  and  full  of  hope,  on  to  a  premature  death, 
leaving  the  world  sorrowful  and  broken-hearted,  chiefly  be- 
cause of  a  defective  education.  How  important  it  is,  then, 
that  the  study  under  consideration  should  receive  the  atten- 
tion of  females  as  well  as  of  males !  Especially  should  Book- 
keeping be  regarded  as  an  indispensable  study  in  every  young 
ladies'  seminary. 

6.  The  one  great  object  which  parents  seek  to  attain  in 
directing  their  children  to  enter  upon  the  study  of  Arithmetic 
in  our  schools,  and  which  youth  have  in  view  in  entering 
upon  it,  is,  that  they  may  become  the  better  qualified  for  the 
discharge  of  the  ordinary  duties  of  life  and  for  the  transaction 
of  such  business  as  they  may  have  occasion  to  engage  in. 
But  if  a  portion  of  the  time  ordinarily  given  to  this  study 
were  judiciously  bestowed  upon  a  practical  system  of  General 
Book-keeping,  this  important  object  would  be  much  more 


QUEST.  7.  In  case  of  bereavement,  which  is  better,  for  widow  and  orphan  to  be 
able  to  conduct  the  business  of  the  husband  and  father,  or  to  depend  upon  friends? 
Should  ladies  learn  Book-keeping  ?  —  8.  Is  this  study  of  less  importance  than 
Arithmetic  ? 

2  13 


INTRODUCTION. 


speedily   reached,   and  with   vastly  more   pleasure   to  the 
learner. 

9.  I  would  not  underrate  the  importance  of  arithmetic  as 
a  study  in  our  primary  institutions  of  learning.     It  has  long 
and  very  properly  been  pursued,  in  all  well  regulated  schools, 
by  both  boys  and  girls,  whose  education  would  be  exceedingly 
defective  without  a  familiar  acquaintance  with  its  principles 
and  their  application   to   the  ordinary  transactions  of  life. 
But  it  is  apparent  that  a  practical  familiarity  with  the  prin- 
ciples of  General  Book-keeping  is  of  much  greater  impor- 
tance than  the  most  perfect  comprehension  of  the  mysteries 
of  square  and  cube  root,   of  arithmetical  and  geometrical 
progression,  of  permutations  and  combinations,  of  the  sum- 
mation of  an  infinite  series,  etc.,  to  say  nothing  of  the  ex- 
ploded rules  of  single  and  double  position,  and  many  others 
that  might  be  enumerated. 

10.  English  Grammar,  which  is  defined  as  the  art  of 
speaking  and  writing  the  English  language  with  propriety 
and  accuracy,  is  now  very  generally  studied  in  our  common 
schools.     But  in  order  to  turn  it  to  the  greatest  account,  its 
principles  should  be  practically  applied,  in  the  school-room,  to 
accounts,  and  to  the  ordinary  business  transactions  of  life. 

11.  Much  attention  is  now  very  properly  paid  to  Penman- 
ship in  our  schools.     But  it  should  be  borne  in  mind  that  the 
great  mass  of  the  people  employ  this  art  chiefly  for  the  pur- 
pose of  recording  business  transactions  and  in  business  cor- 
respondence.    How  important,  then,  that  correct  forms  and 
habits  in  these  respects  be  early  acquired  !     Pupils,  it  ought 
generally  to  be  known,  make  the  most  rapid  improvement  in 
penmanship  when  engaged  in  writing  something  in  which 
they  are  interested,  and  which  they  feel  that  they  can  after- 


QUEST.  9.  Is  Book-keeping  of  more  practical  importance  than  many  of  the  rules 
of  arithmetic  ?  — 10.  What  application  should  be  made  of  the  principles  of  Gram- 
mar ?  — 11.  Is  Penmanship  of  much  practical  importance  ?  When  will  improvement 
in  penmanship  be  most  rapid  ? 

14 


INTRODUCTION. 


ward  turn  to  practical  account.  It  cannot  fail  to  be  apparent, 
then,  that  independently  of  the  benefits  already  enumerated, 
pupils  will  make  greater  improvement  in  this  useful  art  by 
devoting  a  portion  of  their  time  to  practical  accounts  than  by 
writing  after  set  copies. 

12,  It  is  but  a  few  years  since  Book-keeping  has  been 
taught,  to  any  considerable  extent,  in  any  grade  of  Schools  in 
the  country.     And  it  is  not  even  now  taught  in  Colleges  or 
Universities ;  nor  is  it  embraced  among  the  studies  required  to 
be  pursued  preparatory  to   admission  to  these   institutions. 
As  a  consequence  Graduates  of  Colleges  and  learned  Pro- 
fessors are  often  less  familiar  with  the  simplest  principles  of 
business,  than  they  are  supposed  to  be  with  Latin  and  Greek 
roots,  and  with  the  orbits  of  the  Planets  and  their  Satellites  !  * 
Within  the  last  few  years  Book-keeping  has  become  a  study 
in  many  of  our  Public  Schools,  in  both  cities  and  villages, 
and  iif  the  country.     But  Book-keeping  by  Double  Entry  is 
not  less  attractive  as  a  Science,  nor  is  it  less  important  as  a 
means  of  discipline,  than    are    Geometry,   Chemistry,  and 
Natural  Philosophy,  or  even  Latin,  Greek,  and  Astronomy. 
Add  to  this  its  practical  importance,  and  absolute  necessity  in 
a  commercial  country,  like  ours,  and  the  propriety  of  its  in- 
troduction into  our  higher  Seminaries  of  Learning  generally 
must  be  apparent.     Certain  it  is  that  no  person  can  properly 
be  regarded  as  liberally  educated  who  is  unacquainted  with  it. 

13.  The  author  of  this  treatise,  in  the  execution  of  a  plan 
laid  many  years  ago,  and  practically  tested  in  the  school-room, 

*  A  popular  writer  on  education  remarks  that  a  teacher,  who  had  kept  a  private 
school,  was  met  in  a  country  store  by  one  of  his  patrons,  who  paid  him  for  the  tui- 
tion of  his  child;  asking  at  the  same  time  for  a  receipt.  The  teacher  stared  vacantly 
at  his  patron.  "  Just  give  me  a  bit  of  paper,"  said  the  patron,  "  to  show  you've  got 
the  money."  "Oh,  yes,  sir,"  said  the  teacher;  and  taking  a  pen  and  paper,  wrote 
the  following  :  &&•  "  I  have  got  the  money.  J D ." 


QUEST.  12.  How  does  Book-keeping  rank,  in  point  of  importance,  with  branches 
tommonly  taught  in  schools?  IB  a  knowledge  of  Book-keeping  necessary  to  a 
liberal  education? 

15 


INTRODUCTION. 


has  sought  to  supply  what  many  practical  teachers  with  whom 
he  has  compared  views  upon  the  subject  in  various  portions 
of  the  country,  have  hitherto  considered  a  desideratum.  The 
study  of  this  work  may  be  advantageously  commenced  as 
soon  as  the  pupil  is  familiar  with  the  fundamental  rules  of 
arithmetic ;  and  it  may  be  successfully  prosecuted  in  connec- 
tion with  any  of  the  branches  of  an  English  education.  The 
following  are  some  of  its  distinguishing  characteristics :  * 

1.  Before  introducing  the  pupil  to  accounts  in  which  debit 
and  credit  entries  occur,  which  is  usually  the  first  thing  done 
in  treatises  on  Book-keeping,  a  business  transaction  is  de- 
fined, and  the  mode  of  entering  the  same  in  the  books  of 
both  debtor  and  creditor  illustrated.     Several  transactions  are 
then  stated,  in  various  phraseology,  and  the  entries  to  be 
made  in  the  books  of  both  parties  further  exemplified.    These 
entries  —  which  are  in  all  cases  made  in  script  that  closely 
resembles   writing  —  afford   good   models    for  the    learner. 
Then,  in  the  first  example  of  accounts  that  is  presented,  the 
transactions  entered  are  on  the  same  folio  stated  in  common 
language,  which  enables  the  learner  fully  to  comprehend  the 
whole  matter. 

2.  After  giving  a  few  specimens  of  the  mode  of  keeping 
accounts  by  the  first  and  simplest  form,  together  with  the 
necessary  instructions  to   the   learner,  a  series  of  business 
transactions,  drawn  from  the  ordinary  pursuits  of  life,  are 
introduced,  in  the  form  of  problems  to  be  solved.     In  their 
solution  it  becomes  necessary,  from  inspecting  the  transac- 
tions, merely,  to  compute  the  value  of  whatever  has  been 
bought  or  sold,  the  price  and  the  quantity  being  given  ;  to 
make  the  requisite  debit  and  credit  entries,  after  first  deter- 
mining to  which  side  of  the  account  each  transaction  belongs ; 
and  then  to  balance  the  several  accounts,  which  are  to  be 

*  Since  the  first  publication  of  this  work,  in  1851,  other  volumes  on  the  same  sub- 
ject have  been  printed,  in  which  some  of  these  distinguishing  features  have  been 
copied  ;  but  in  no  other  work,  so  far  as  the  writer  knows,  can  they  all  be  found.  New 
features  of  interest  are  also  introduced  into  this  revised  edition. 

16 


INTRODUCTION. 


written  out  like  the  patterns  already  set,  and  entered  in  a 
blank  book  prepared  for  that  purpose. 

3.  Numerous  Examples  for  Practice  are  likewise  intro» 
duced  in  each  of  the  five  remaining  forms  of  account,  witi 
accompanying  blank  Account  Books  appropriately  ruled,  in 
which  they  are  to  be  entered  when  solved.     These   blank 
books  contain  engraved  Forms  for'  writing  up  Day  Book, 
Journal,  and  Ledger,  and  for  Notes,  Drafts,  and  Bills  of 
Exchange,  with  business  forms  generally,  and  may  hence 
advantageously  be  employed  as  writing-books. 

4.  The   instructions  in  relation  to  the  mode  of  keeping 
accounts,  which  will  be  found  sufficiently  full  for  all  ordinary 
purposes,  even  in  the  simplest  forms,  are  generally  given  on 
the  same  page  or  folio  with  the  illustrative  examples,  with 
carefully  prepared  questions  for  the  examination  of  classes. 

5.  For  the  convenience  of  Teachers  in  examining  the 
work  of  their  classes,  as  well  as  for  the  encouragement  of  the 
private  learner,  a  Key  has  been  prepared  to  accompany  this 
work,  in  which  all  the  Examples  for  Practice  are  correctly 
entered  in  the  various  books  used,  and  the  accounts  balanced 
and  closed,  so  that   no  teacher,  however  inexperienced  in 
keeping  accounts,  need  shrink  from  undertaking  to  prepare 
himself  for  instructing  classes  in  the  use  of  this  book. 

6.  The  present  Revised  Edition  of  this  work,  while  it  re. 
tains  the  simplicity  and  gradually  progressive  character  of 
former   editions,  is   more   complete    than    they   were,   and 
especially  in  Double  Entry.     The  Diagram  exhibiting  the 
mode  of  closing  accounts,  p.  183,  will    enable   the  learner 
readily  to  comprehend  what  has  hitherto  been  justly  regarded 
as  the  most  difficult  feature  of  Double  Entry  Book-keeping. 

7.  The  Examples  for  Practice,  interspersed  throughout  the 
work,  give  the  pupil  the  benefit  of  combining  the  Theory  and 
Practice  of  accounts,  and  of  deriving  at  once  the  advantages 
of  both  school-room  and  counting-room. 

8.  All  the  real  advantages  of  printing  in  colors  are  incor- 

2*  17 


INTRODUCTION. 


porated  into  this  edition,  and  still  it  is  furnished  at  an  unpre- 
cedentedly  low  price  for  a  complete  treatise  on  Book-keeping. 
These  characteristics  are  believed  to  be  peculiar  to  this 
work.  They  make  the  whole  subject  perfectly  intelligible  to 
the  intermediate  classes  in  our  common  schools,  as  well  as  to 
those  more  advanced,  and  invest  it  with  so  much  of  interest 
as  to  render  it  highly  attractive.  In  its  use,  it  is  confidently 
believed  scholars  will  more  rapidly  acquire  that  facility  in 
making  business  computations  which  is  most  desirable,  than 
by  devoting  the  same  time  exclusively  to  the  study  of  arith- 
metic, as  has  hitherto  been  generally  practiced ;  that  they 
will  make  greater  proficiency  in  penmanship  than  though  an 
equal  amount  of  time  were  devoted  to  writing  after  set  copies ; 
and  that  they  will  at  the  same  time  more  readily  acquire  a 
thorough  and  practical  knowledge  of  Book-keeping  than 
from  the  study  of  any  work  that  has  heretofore  been  given 
to  the  public.  So,  view  it  in  what  light  we  may,  the  ad- 
vantages arising  from  the  study  of  Book-keeping,  with  the 
improved  methods  here  presented,  are  too  great  and  too  nu- 
merous to  allow  much  time  to  elapse  before  its  general 
introduction  into  all  our  common,  intermediate,  and  high 
schools. 

NOTE.  By  referring  to  the  opinions  of  Teachers  who  have  used  this  book,  and  of 
Practical  Educators  who  have  carefully  examined  its  claims,  it  will  be  seen  that  th« 
Tiews  of  the  author,  as  here  expressed,  are  regarded  as  fully  realized  by  those  who 
have  given  most  attention  to  the  subject,  and  are  competent  to  judge. 

18 


PART    FIRST. 

GENERAL   BOOK-KEEPING. 


ART.  14.  BOOK-KEEPING  is  the  art  of  keeping  accounti 
in  such  a  manner  that  a  person  may  at  any  time  know  the 
true  state  of  his  business,  or  of  his  debts  and  credits,  by  an 
inspection  of  his  books.  The  term  General  Book-keeping 
signifies  that  kind  of  book-keeping  which  is  suitable  for  per- 
sons generally,  such  as  farmers,  mechanics,  professional  men, 
retailers,  and,  indeed,  all  persons  except  merchants  engaged 
in  a  wholesale  business. 

15.  Were  persons  universally  to  receive  an  equivalent 
for  their  wares  when  sold,  and  were  they  enabled  to  pay  at 
the  time  for  whatever  they  have  occasion  to  purchase,  it 
would  still  be  desirable  to  keep  a  record  of  their  business 
transactions.     This  necessity  becomes  imperative  whenever 
products  and  goods  are  bought  and  sold  without  making  pay- 
ment at  the  time. 

DEBTOR  AND   CREDITOR. 

16.  Whenever  one  person  receives  any  thing  from  an^ 
other,  which  he  does  not  pay  for  at  the  time,  he  is  said  to  go 
in  debt  for  it,  and  is  called  a  Debtor.     A  person  who  sells 
property  without  receiving  his  pay  at  the  time,  is  said  to  give 
credit  for  it,  and  is  called  a  Creditor.     In  other  words,  the 
receiver  is  always  the  Debtor,  and  the  giver  is  always  the 
Creditor.     In  keeping  accounts  it  is  customary,  and   more 

QUEST.  14.  What  is  Book-keeping  1  What  is  meant  by  General  Book-keeping  1 
— 15.  Is  it  always  desirable  to  keep  a  record  of  business  transactions  1  When  does 
this  necessity  become  imperative?  — 16.  When  does  a  person  become  a  Debtor? 
Yv  hen  a  Creditor  ?  When  property  exchanges  hands  without  payment  being  made 
at  the  time,  what  general  rule  is  stated  in  relation  to  the  receiver  and  giver  of  it? 

19 


GENERAL    BOOK-KEEPING. 


convenient,  to  abridge  and  write  Dr.  for  Debtor,  and  Cr.  for 
Creditor. 

17.  The  act  of  buying  or  selling  is  called  a  Transaction. 
In  every  transaction  there  must  be  both  a  buyer  and  a  seller. 
Where  the  property  which  exchanges  hands  is  not  paid  for  at 
the  time  of  the  transfer,  the  buyer  becomes  a  Debtor,  and  the 
seller  a  Creditor.  The  following  will  serve  as  an  illustration 
of  the  correct  use  of  the  terms  already  employed  : 

TRANSACTION.  —  James  Armitage  buys  of  Isaac  Merrill 
one  pair  of  Kip  Boots,  for  which  he  is  to  pay  him  four  dollars. 

In  this  transaction  James  Armitage  is  the  Debtor,  because 
he  is  the  receiver  ;  and  Isaac  Merrill  is  the  Creditor,  because 
he  is  the  giver  ;  or,  in  other  words,  the  furnisher. 

The  parties  make  the  following  entries  in  their  respective 
books,  under  the  date  of  the  transaction  : 

Isaac  Merrill  writes  in  his  book, 


oot*,  .       .       $4.00 

James  Armitage  writes  in  his  book, 


o     Qi        ooo,  $4.00 

&  / 

18.  By  examining  these  entries  the  pupil  will  see  that  the 
creditor  writes  the  debtor's  name  in  his  book,  and  that  the 
debtor  writes  the  creditor's  name  in  his  book.     This  should 
be  remembered,  for  it  constitutes  an  invariable  rule. 

19.  The  word  oTa,  with  which  the  creditor  commences  the 
entry  in  his  book,  indicates  the  passage  of  whatever  has  been 
sold,  from  him  to  the  debtor  ;  and  the  word  gfiy,  with  which  the 

QUEST.  16.  What  abbreviations  are  used  for  Debtor  and  Creditor  ?  —  17.  What 
is  a  Transaction  ?  What  must  there  be  in  every  Transaction  ?  Which  becomes 
the  Debtor,  and  which  the  Creditor?  State  a  Transaction.  In  this  Transaction 
•who  is  the  Debtor,  and  why  ?  Who  the  Creditor,  and  why  ?  In  the  Trans- 
action stated,  what  entries  should  the  parties  make  in  their  respective  books?  — 
18.  Whose  name  does  the  creditor,  write  in  his  book  ?  Whose  name  does  the  debtor 
write  in  his  book  ?  Why  ought  this  to  be  remembered  ?  —  19.  What  does  the  word 
To,  with  which  the  creditor  commences  the  entry  in  his  book,  indicate  ?  What  tha 
word  By,  with  which  the  debtor  commences  the  entry  in  his  book? 


GENERAL    BOOK-KEEPING. 


debtor  commences  the  entry  in  his  book,  the  reception  fy 
him  of  that  which  the  creditor  has  charged  to  him.  In  other 
words,  the  oTo,  on  the  Dr.  side  of  an  account,  indicates  in- 
debtedness to  us  from  the  person  named  in  the  account ;  and 
the  3$™,  on  the  Cr.  side  of  the  account,  indicates  indebted- 
ness by  us  to  the  person  named  in  the  account. 

20.  The  following  examples  will   further  illustrate  the 
mode  of  entering  transactions  in  the  books  of  both  debtor 
and  creditor,  with  which  the  pupil  should  become  familiar 
before  progressing  further.     For  this  purpose  separate  sheets 
of  paper  may  be  used.     Let  the  pupil  write  the  transactions 
on  one  page,  numbering  them,  and  make  the  proper  entries 
on  another  page,  with  their  corresponding  numbers  and  cor- 
rect dates,  as  in  the  annexed  examples.     The  transactions 
may  be  copied  from  the  book.     The  entries  should  be.  made 
like  those  in  the  examples  given :  but  they  should  be  made 
from  an  examination  of  the  transaction  ;  not  copied  from  the 
book.     The  pupil  might  also  write  out  additional  transac- 
tions, and  having    studied   them  carefully,  be  prepared  in 
recitation  to  give  the  entries  either  on  the  blackboard,  in 
writing,  or  orally,  all  of  which  methods  might  in  turn  be 
practiced. 

21.  The  price  and  the  quantity  being  given,  the  learner 
should,  from  the  first,  invariably  compute  the  value  of  all 
articles  bought  or  sold,  whether  the  calculations  are  made  in 
the  book  or  not.     It  would  be  to  his  advantage  to  do  this  in 
studying  any  treatise  on  Book-keeping.     But  in  the  use  of 
this  work  it  becomes  absolutely  necessary  ;  for  the  pupil  will 
soon  be  called  upon  to  record  transactions  where  such  com- 
putations are  unavoidable. 

QUEST.  20.  Should  entries  be  copied  from  the  book  ?  How  should  they  be  made  ? 
—  21.  What  computations  should  the  learner  invariably  make  ?  Are  such  compu- 
tations avoidable  in  the  study  of  this  treatise  ? 

State  the  first  transaction,  and  give  the  entries  to  be  made  in  the  books  of  both 
parties.  State  the  second  transaction  and  the  entries.  The  third,  etc.  Let  the  pupil 
itate  additional  transactions,  and  give  the  entries  orally,  or  on  the  blackboard. 

21 


SEVERAL  TRANSACTIONS: 


TRANSACTION  1.    JANUARY  1st,  1860. 

James  Armitage  buys  of  Isaac  Merrill  one  pair  of  Kip 
boots,  for  which  he  is  to  pay  him  four  dollars. 

James  Armitage  is  the  debtor,  because  he  is  the  receiver. 
Isaac  Merrill  is  the  creditor,  because  he  is  the  giver. 


TRANSACTION  2.  JANUARY  2d,  1860. 

Hallock  &  Raymond  sell  to  John  S.  Barry  one  suit  of 
clothes,  for  which  he  is  to  pay  them  fifty-two  dollars. 

John  S.  Barry  is  the  debtor,  because  he  is  the  receiver. 
Hallock  &  Raymond  are  the  creditors,  because  they  are  the 
givers,  or  the  sellers. 


TRANSACTION  3.  JANUARY  3d,  1860. 

William  H.  Boyd  sells  to  Charles  G.  Johnson  40  Ibs.  of 
nails,  for  six  cents  a  pound. 

C.  G.  Johnson  is  the  debtor,  because  he  is  the  receiver. 
Wm.  H.  Boyd  is  the  creditor,  because  he  is  the  giver. 


TRANSACTION  4.    JANUARY  4th,  1860. 

Alex.  McFarren  buys  of  Harper  &  Brothers  4  dozen 
copies  of  Mayhew  on  Education,  at  $9.00  a  dozen. 

Alex.  McFarren  is  tha  debtor,  because  he  is  the  receiver. 
Harper  &  Brothers  are  the  creditors,  because  they  are  the 
givers,  or  the  sellers. 


MODE  OF  ENTERING  THEM. 

f$63, 

/an. 

V** 

( 
1 

/ 

Isaac  Merrill  writes  in  his  book, 

^amed   Qs£i?nitage,    .                               k^xz. 

(s                                              ff 

G^o  <me/  ^%*P  o/  offi/i  gftocte, 

James  Armitage  writes  in  his  book, 

GfAaa*  &%etz€^/,          ....         ^. 
^  (me  &a^  o/  e%Z/i,  gftooto, 

4 

4 

06 
06 

f$60. 

a- 

£a/n,. 

9 

Hallock  &  Raymond  write  in  their  book, 

Jo£n  e£f  gftany,                                     ^. 

cr 

fan,. 

2 

<2?£  one/   G&ujJ  oft  ^JctSte*),     .       . 

John  S.  Barry  writes  in  his  book, 

^V2?  />/   /      !/•    tfTS                     /                                    f2? 

£7£a(iocfc   £(   ^/Laumona,         .       .         ^^. 
^  one/  <&ta  c/  <%&t&»,  .       . 

52 
52 

00 
Off 

<f$60. 

Jfan. 

,? 

Wm.  H.  Boyd  writes  in  his  book, 

^    ^      &£nocn,                                      Q5t. 

(7 

g- 
JtaM,. 

,? 

6%  40  /&.  o/  <3tfa<&,      .       .          .06 

C.  G.  Johnson  writes  in  his  book, 

/V#?              /Jg?     /J7f          t                                                           S-j? 

STm.    &£.    &doua,                                     <~&^. 

2 

40 

£7 

y 

gfty  40  &.  o/  Gtfa<%,     .       .          .06 

* 

40 

<$60. 
fan. 

** 

4 
4 

Harper  &  Brothers  write  in  their  book, 

Q&ev.  &%cd/fatzen,    .      „        .        .        Q5t. 
oTo  4  do*.  Q^fca'U'/iew  on/  $d  '  n,     p.  00 

Alex.  McFarren  writes  in  his  book, 

3%Z*f*£>  g  tf&Ot&M,        ...           ^. 

(2%y4ckx.  Q^&VU&KW  on/  $ct'n,    p.OO 
83 

36 
36 

00 
00 

GENERAL    BOOK-KEEPING. 


ACCOUNT  BOOKS. 

22.  The  number  of  books  necessary  for  use,  and  the  par- 
ticular mode  of  keeping  one's  accounts,  must  depend  upon 
the  nature  and  extent  of  his  business.     Forms  are  sometimes 
given  for  Farmers ;  others,  for  Mechanics ;  and  others  still, 
for  Merchants.     But  so  great  is  the  difference  in  the  extent 
and  variety  of  business  carried  on  by  these  and  other  classes 
of  persons,  that  some   farmers  find  it  desirable  to  keep  a 
greater  number  of  books  than  are  requisite  for  mechanics ; 
and  other  farmers,  and  mechanics,  not  unfrequently  do  a  more 
varied  and  extensive  business  than  is  sometimes  carried  on 
by  the  merchant.     In  a  treatise  on  General  Book-keeping, 
then,  it  seems  befitting  to  commence  with  the  simplest  form 
of  accounts,  which  will  be  found  convenient  for  persons  en- 
gaged in  a  limited  business  of  almost  any  kind,  and  afterward 
introduce  others,  and  leave  persons  to  select  the  form  they 
shall  deem  best  adapted  to  their  particular  business,  taking 
into  the  account  both  its  nature  and  extent. 

23.  Three  forms  for  keeping  accounts  are  presented,  in 
this  treatise,  in  Single  Entry,  and  three  in  Double  Entry. 

FIRST  FORM  OF  ACCOUNTS. 

24.  The  LEDGER,  which  is  indispensable,  even  where  the 
Day  Book  and  Journal  are  used  as  preliminary  books,  is  the 
most  important  book  in  General  Book-keeping,  and  the  only 
one  necessary  in  the  first  form  of  accounts.     Its  object  is  to 
show  how  the  owner  of  the  book  stands  toward  the  various 
persons  with  whom  he  has  credit  transactions. 

QUEST.  22.  Upon  what  must  the  number  of  books  used  and  the  mode  of  keeping 
One's  accounts  depend  ?  Why  cannot  particular  forms  be  prescribed  for  Farmers, 
Mechanics,  and  Merchants  ?  —  23.  How  many  forms  for  keeping  accounts  are  given 
In  this  treatise?  — 24.  What  book  only  is  necessary  in  the  first  form?  Can  the 
Ledger  be  dispensed  with  when  the  Day  Book  and  Journal  are  used  as  preliminary 
books !  What  is  the  object  of  the  Ledger  ? 

24 


GENERAL    BOOK-KEEPING. 


25.  Two  pages  opposite  each  other  are  appropriated  for 
each  individual  account.     The  name  of  each  person  with 
whom  we  open  an  account  (and  his  residence  when  this  is 
necessary  to  identify  him)  should  be  written  in  a  bold  hand 
at  the  top  of  the  page,  or  at  the  head  of  the  account,  for  a 
title,  as  in  the  annexed  examples. 

26.  The  left-hand  page  is  devoted  to  the  Dr.  entries  of 
the  account,  and  the  right-hand  page  to  the  Cr.  entries.     It 
should  be  borne  in  mind  that  the  word  ©%   which  com- 
mences each  entry  on  the  Dr.  side  of  an  account,  indicates 
indebtedness  to  us,  from  the  person  whose  name  stands  at 
the  head  of  the  account ;  and  that  the  word  &$u,  which  com- 
mences each  entry  on  the  Cr.  side  of  an  account,  indicates 
indebtedness  by  us,  to  the  person  with  whom  we  keep  the 
account.     (Art.  19.) 

27.  The  words  @/£  and  Offiu,  as  signs  of  Dr.  and  Cr.  en- 
tries, are   sometimes  omitted,  in  both  Single   and   Double 
Entry ;  and  the  Dr.  and  Cr.  sides  of  an  account  are  often 
both  kept  on  the  same  page,  though  not  in  this  form   of 
accounts.     But  in  every  form  of  accounts  two  sets  of  money 
columns  are  required.    The  left-hand  set  is  uniformly  employed 
for  Dr.  entries,  and  the  right-hand  set  for  Cr.  entries. 

28.  In  the  first  form  of  accounts  each  page  is  divided  by 
perpendicular  lines  into  five  spaces ;  in  the  first  of  which, 
commencing  at  the  left-hand,  the  year  and  month  are  en- 
tered ;  in  the  second,  the  day  of  the  month ;  in  the  third,  the 
items  bought  or  sold ;  and  in  the  fourth  and  fifth,  their  value 
in  dollars  and  cents. 


QUEST.  25.  What  space  is  appropriated  to  an  account  in  the  first  form  ?  What 
should  be  written  at  the  head  of  each  person's  account  ?  When  should  the  resi- 
dence of  a  person  be  given  in  the  title  of  his  account?  —  26.  When  two  pages  are 
appropriated  to  an  account,  which  is  devoted  to  the  Dr.  entries?  Which  to  the  Cr. 
entries  ?  What  is  said  of  the  words  To  and  By?  —  27.  Are  these  words  ever  omitted  ? 
How  many  sets  of  money  columns  are  always  required  ?  How  are  they  employed  ?  — 
28.  Into  how  many  spaces  is  each  page  divided,  and  what  should  be  entered  in  tho 
several  spaces? 

3  25 


GENERAL   BOOK-KEEPING. 


29.  When  a  person  has  occasion  to  use  several  Ledgers, 
as  all  do  who  engage  extensively  in  business,  it  is  customary 
to   designate   them   by  the   letters   of  the   alphabet,  thus : 
Ledger  A ;  Ledger  B ;  etc.     Different  Ledgers  are  likewise 
frequently  employed  by  persons  at  the  same  time,  when  en- 
gaged in  an  extended  and  varied  business,  separate  Ledgers 
being  devoted  to  retail  sales,  and  to  different  branches  of  one's 
business.     In  such  cases  the  results  of  these  smaller  Ledgers 
are  periodically  carried  to  the  principal  Ledger. 

THE  INDEX. 

30.  The  Index  is  a  small  book  in  which  the  names  of  all 
persons  having  accounts  in  the  Ledger,  and  the  titles  of  ac- 
counts  other   than   personal,  are  arranged   in   alphabetical 
order,  under  their  initial  letters,  with  reference  to  the  folios 
or  pages  in  which   they  stand.     When  small  Ledgers  are 
employed  the  Index  may  be  conveniently  written  in  a  few 
of  the  first  pages  of  the  Ledger :  but  where  large  Ledgers 
are  used,  it  will  be  found  more  convenient  to  employ  a  sep- 
arate Index.     When  an  account  is  transferred  from  one  folio 
to  another,  as  in  the  case  of  Henry  Van  Allen,  both  folios 
should  be  noted  in  the  Index.     This  account,  originally  kept 
on  th3  8th  folio,  has  been  carried  to  the  9th. 


QUEST.  29.  When  a  person  has  several  Ledgers,  how  are  they  usually  designated  ? 
When,  are  different  Ledgers  employed  at  the  same  time?  Where  are  the  results  of 
these  Ledgers  carried  ?  — 30.  What  is  the  Index?  When  may  it  be  kept  in  the 
Ledger?  When  an  account  is  transferred  to  a  new  folio  what  should  be  noted  in  the 

26 


INDEX  TO  LEDGER  A. 


L  M 


B 


N  O 


Q 


D  E 


R  S 


F  G 


T  U  V 


H  I 


J  K 


w 


G^cct. 


X  Y  Z 


<fO 


0    4- 

//  to 


(tttCKOtty       . 

©^ 
t&a> 


f.75 


6.50 


t 


26 


cto. 
00 
50 
00 
00 

50 


31.  The  above  is  an  account  with  James  Brown,  a  Black- 
smith, in  which  seven  transactions  are  entered. 

Transaction  1.  January  2d,  1860.  James  Brown  shoes 
my  horses,  (each  pupil  may  suppose  them  his,)  for  which  I 
am  to  pay  him  $1.75.  Here  I  am  the  receiver,  and  hence 
the  debtor.  James  Brown  is  the  giver,  and  hence  the  cred- 
itor. I,  then,  having  written  his  name  in  my  book,  credit 
him  with  the  amount  of  the  work  done  for  me ;  but  as  the 
last  two  columns  are  understood  to  be  for  dollars  and  cents, 
it  was  not  necessary  to  write  the  sign  for  dollars  and  cents. 

Tr.  2.  Jan.  5th.  I  sell  James  Brown  4  cords  of  Hickory 
wood,  for  which  he  is  to  pay  me  $1.75  a  cord.  In  this  trans- 
action he  is  the  receiver,  and  hence  the  debtor,  and  I  accord- 
ingly debit  him  for  the  amount,  $7.00. 

Tr.  3.  Jan.  10th.  I  sell  James  Brown  10  bbls.  of  Apples 
at  $1.25  a  bbl.,  amounting  in  all  to  $12.50,  and  again  debit 
him,  as  in  the  2d  transaction. 

Tr.  4.  Feb.  2d.  I  sell  James  Brown  four  tons  of  Hay  at 
$6.50  a  ton,  amounting  to  $26.00,  and  debit  him  accordingly, 
he  having  been  the  receiver,  and  hence  the  debtor,  in  each 
of  the  last  three  transactions. 

Tr.  5.  June  3d.  I  buy  of  James  Brown  one  Lumber 
Wagon,  for  which  I  am  to  pay  him  $50.00.  Here  he  again 

QUEST.  31.  How  many  transactions  in  the  account  with  James  Brown  ?  What 
is  the  first  transaction,  and  what  the  entry?  What  the  second,  and  entry"?  The 
third,  and  entry  ?  Fourth,  and  entry  ?  Fifth,  and  entry  ? 

28 


£a 


/it 
G/Vo 


50 


00 
50 


50 


becomes  the  giver,  or  furnisher,  and  I  the  receiver.  I  hence 
credit  him  accordingly. 

TV.  6.  Nov.  10th.  James  Brown  repairs  my  Sleigh,  for 
which  he  charges  me  $4.50.  In  this  transaction,  as  in  the 
last,  he  is  the  giver,  and  I  am  the  receiver,  and  I  hence  credit 
him  with  the  amount  of  the  work  done. 

TV.  7.  Nov.  15th.  Here  James  Brown  shoes  one  of  my 
horses,  and  the  entry  exhibits  the  necessary  credit. 

32.  Settlement.  Dec.  28th.  Accounts  should  be  settled 
at  least  once  every  year.  As,  then,  the  end  of  the  year  ap- 
proaches, I  call  on  James  Brown  for  my  annual  settlement 
with  him.  We  first  add  the  sums  in  the  money  columns  of 
the  credit  side  of  the  account,  and  find  they  amount  to  $57.50, 
which  is  the  sum  total  of  all  I  have  received  from  him.  We 
next  add  the  sums  in  the  money  columns  of  the  debit  side, 
and  find  they  amount  to  $45.50,  which  is  the  sum  total  of  all 
I  have  let  him  have.  We  then  subtract  the  amount  of  the 
debits  from  the  amount  of  the  credits.  This  gives  a  remain, 
der  of  $12.00,  which  is  the  amount  of  my  indebtedness  to 
him.  I  pay  him  this  sum,  and  debit  him  "  To  Cash  to  Bal- 
ance, $12.00."  Finally,  I  draw  single  lines  under  the  money 
columns,  and  after  adding  them  and  placing  the  amount, 
$57.50,  under  each,  draw  double  lines  beneath,  to  show  that 
the  account  is  balanced  and  closed. 


QUEST.  31.    What  the  sixth   transaction  and  entry?     Seventh,  and  entry ?  — 
32.  How  often  should  accounts  be  settled  ?    How  is  this  account  settled  and  closedl 


^fa*.       / 


60 


cto. 

00 
00 
00 


00 


33.  The  foregoing  is  an  account  with  Samuel  Adams,  a 
Retail  Merchant.  I  have  sold  him  produce  at  three  different 
times,  amounting  in  all  to  $106.00.  Dec.  31.  —  I  call  on  him 
for  settlement.  By  adding  the  sums  credited  to  him,  we  find 
they  amount  to  $97.83.  By  subtracting  this  sum  from  the 
amount  of  his  debits,  it  appears  there  is  due  me  $8.17.  As 
I  have  no  occasion  to  use  either  money  or  goods  at  this  time, 
and  expect  to  do  my  trading  with  him  another  year,  the  ac- 
count is  balanced  as  follows :  I  credit  him  "  By  Balance, 
$8.17."  This  done,  the  debits  and  credits  amount  to  the 
iame.  I  now  draw  single  lines  under  the  money  columns, 
directly  opposite  each  other,  as  before,  placing  the  amount 
under  them,  and  drawing  the  double  lines  beneath,  to  signify 
that  the  account  has  been  examined  and  found  correct.  The 
$8.17  is  entered  in  different  type  from  the  rest  of  the  ac- 


QUEST.  33.    How  is  the  account  with  Samuel  Adams  settled  ?  What  of  the  balance ? 


r 


.    A. 00 


and 


4  a. 
W<* 

30   ^fratn,  &fapA 


So 


4  &we  o/^atico,  34 

8    CV4.    SfflO'tV 

Balance  (due  me) 


.25 

y 
liuce 

.      .45 

.09 


7 

25 

22 

5 

8 


406 


25 
00 
50 
75 

jy 

75 

70 
50 
75 
50 
40 
72 
17 
OC 


count.  This  indicates  that  it  is  due  me,  but  not  paid.  Such 
entries  are  often  made  in  red  ink.  The  Balance  I  debit  him 
below,  as  the  amount  due  me  on  settlement. 

34.  When  one  side  of  the  account  contains  more  entries 
than  the  other,  as  in  this  example,  an  oblique  line  should  be 
drawn  across  the  unoccupied  space,  as  is  here  done.  The 
Dr.  and  Cr.  amounts,  when  footed,  should  equal  each  other, 
and  be  on  the  same  horizontal  line,  as  in  this  example. 

350  The  Bill  of  Goods  on  account  of  John  Bruce,  my 
hired  man,  bought  April  12,  I  credit  to  the  Merchant  and 
debit  to  Bruce ;  also  my  Order  in  his  favor  of  July  2.  When 
goods  are  creditec^  "  by  bill,"  as  in  this  instance,  the  bill  should 
be  kept  till  the  accounts  are  settled. 

QUEST.  34.  When  one  side  of  the  account  contains  more  entries  than  the  other, 
what  rule  should  be  observed  in  relation  to  the  footings?  — 35.  What  items  that  are 
credited  in  this  account  are  debited  in  another  account?  When  goods  are  credited 
by  hill,  how  long  should  the  bills  be  kept  ? 

a 


4$ 


TIP. 


at  60 


to 


25 
.    7 


$5 


76 
50 
50 

25 

00 


36.  Here  is  represented  an  account  with  John  Bruce,  my 
hired  man :   (for  the  terms  of  my  contract  with  him,  see 
Memorandum  Book,  58th  page.)    The  first  and  third  debits  in 
his  account  are  credits  in  the  account  with  Samuel  Adams,  as 
exhibited  on  the  last  preceding  page.     I  have  also  debited 
him  the  amount  paid  W.  Wood  on  his  behalf  for  making  a 
suit  of  clothes,  and  with  my  Note  to  balance,  and  thus  closed 
the  account.     I  have  debited  him  with  my  Note,  the  same  as 
I  should  have  done  with  Cash,  had  I  paid  him  the  money  to 
balance.     This  fulfills  my  agreement  with  him,  as  per  memo- 
randum referred  to.     My  note  I  shall  of  course  expect  to 
pay  when  it  becomes  due.  (See  Bills  Payable,  50th  page.) 

37.  These  entries,  and  the  two  referred  to  in  the  account 
with  Samuel  Adams,  are  made  in  accordance  with  a  principle 
already  stated  and  elucidated,  which  enables  us  to  determine 
where  to  enter  every  transaction  belonging  to  personal  ac- 
counts.    The  principle  is  this :    The  receiver  is  always  the 
Debtor,  and  the  giver  is  always  the  Creditor.     No  distinction 
is  made  between  cash,  notes,  goods,  accepted  orders,  (see 
remarks  in  relation  to  Orders,  Art.  164,)  money  due  for  ser- 
vices, or  houses  and  lands.     Whenever  a  person  receives  any 

QUEST.  36.  In  case  I  make  an  order  on  Samuel  Adams  for  $22.50,  payable  to 
John  Bruce,  how  should  I  enter  the  transaction  in  their  respective  accounts?  In 
case  I  give  my  note  to  John  Bruce  to  balance  an  account  on  settlement,  how  do  I 
enter  the  transaction  in  his  account? 

32 


5         etc.  cto. 


40.00 

ff.OO 


30 

55 


00 
00 


00 


of  these  or  other  property  from  you,  or  you  pay  them  on  his 
behalf,  the  transaction  should  be  entered  on  the  Dr.  side  of 
his  account.  When  he  pays  them  to  you,  or  on  your  behalf, 
and  thus  becomes  the  giver,  and  you  the  receiver,  the  transac- 
tion should  be  entered  on  the  Cr.  side  of  his  account.  In 
the  case  of  my  order  on  Samuel  Adams  for  $  22.50  in  favor 
of  John  Bruce,  Adams  is  the  giver  to  Bruce,  on  my  account, 
and  hence  my  Creditor;  and  Bruce  is  the  receiver  from 
Adams,  on  my  account,  and  hence  my  Debtor.  This  prin- 
ciple is  of  universal  application. 

38.  The  symbol  of  a  Pair  of  Scales  on  the  Title  Page, 
which  beautifully  illustrates  the  general  principle  that  the 
Dr.  and  Cr.  sides  of  an  account  ought  always  to  balance, 
particularly  illustrates  the  account  here  introduced.  As  the 
four  smaller  weights  at  the  left  arm  of  the  scales  are  exactly 
counterpoised  by  the  two  larger  ones  at  the  right  arm,  so  the 
four  smaller  entries  on  the  Dr.  side  of  the  account  exactly 
balance  the  two  larger  ones  on  the  Cr.  side.  Another  symbol 
is  referred  to  in  Art.  277. 


QUEST.  37.  What  general  rule  is  stated  which  enables  us  to  determine  on  which 
side  of  an  account,  to  enter  a  transaction  ?  Does  the  rule  apply  to  notes  and  orders  as 
well  as  to  money  and  goods?  When  a  person  receives  property  from  you,  or  you  pay 
it  on  his  behalf,  how  is  the  transaction  entered?  How,  when  he  pays  to  you  or  on 
your  behalf?  Is  this  principle  of  universal  application?  —  38.  What  principle  does 
the  symbol  on  the  title  page  illustrate?  Apply  that  symbol  to  this  account. 


// 
4$60. 


o        do. 


4$ 
346  08u* 
cfo.          ao. 


2.00 
4.50 
2.00 
.$0 
4.00 
4.50 

4.50 


.or 


Profit  on  the  Crop 


6 
SO 
24 

2 
42 


6 

25 

70 


a*. 

00 
00 
00 
60 
00 
00 

00 

00 
20 
20 

20 


39.  The  above  is  an  account  with  a  Wheatfield  of  18 
acres,  from  which  it  appears  that  the  net  profit  (after  paying 
the  interest  on  the  value  of  the  land,  and  all  the  expenses  of 
raising  the  crop)  is  seventy  dollars  and  twenty  cents.  The 
account  is  kept  just  as  an  account  with  a  person  is :  The 
field  is  debited  with  every  thing  put  upon  it,  with  every  ex- 
pense made  on  its  account,  and  with  the  interest  on  the  land 
at  a  fair  valuation.  It  is  credited  with  every  thing  it  pro- 
duces, and  with  every  thing  received  on  its  account.  The 
excess  of  the  credits  over  the  debits  gives  the  net  profit, 
which  must  be  entered  on  the  Dr.  side  of  the  account  in 
order  to  balance.  (Art.  33.)  Accounts  may  be  kept  in  like 
manner  with  every  branch  of  one's  business,  whether  agri- 
cultural, mechanical,  commercial,  or  speculative. 

QUEST.  39.  In  the  account  with  a  Wheatfield  of  18  acres,  what  is  the  net  profit  ? 
How  is  the  account  kept?  With  what  is  the  field  debited,  and  with  what  credited? 
How  is  the  net  profit  ascertained  ?  With  what  kinds  of  business  may  accounts  be 
kept  in  this  way  ? 

31 


236 


00 


40.  Were  persons  generally  to  keep  such  accounts,  they 
could  ascertain,  with   great  accuracy,  what  pursuits   afford 
certain  profits,  and  what  particular  department  of  their  busi- 
ness is  most  lucrative ;  also,  what  enterprises  are  hazardous 
and  unproductive  ;  and,  by  regulating  themselves  accordingly, 
they  would  of  course  best  promote  their  own  pecuniary  in- 
terests, and  at  the  same  time  contribute  most  effectually  to 
advance  the  general  prosperity  of  the  community  in  which 
they  live.      (Arts.  218  to  225.) 

41.  When   the   debits  in  such  an   account   exceed  the 
credits,  and  it  becomes  necessary  in  balancing  the  account  to 
make. the  last  entry  on  the  Cr.  side,  it  is  evident  the  enter- 
prise is  attended  with  loss,  as  is  exemplified  in  the  account 
with  a  Grain  Speculator  on  the  next  folio. 


QUEST.  40.  What  advantages  would  result  to  the  individual  and  to  the  commu- 
nity if  persons  generally  were  to  keep  such  accounts  ?  — *41.  When  the  debits  in 
such  an  account  exceed  the  credits,  is  the  enterprise  attended  with  gain  or  lo?s? 


step. 


4$60. 


40 

20 
27 
40 


to 


at 


.45 


do.  .04 

''     3/n<Mt/iance  aaatndt  Qfltie  %  fat  cent, 
to  gft<J£i&          .03 


on 
on 


at 

at\ 
fa6 


cent. 
.07 


7200 
4500 


400 
43 

300 
43 

400 
43 

304 


9935 


cto. 
00 
00 


00 
50 
00 
50 
00 
50 
50 


00 


42.  Above  is  the  account  of  a  Grain  Speculator,  who 
made  a  purchase  in  Southern  Michigan,  the  10th  of  Nov., 
with  the  expectation  of  getting  the  same  forward  to  Buffalo, 
making  sales  at  97  cents,  and  getting  returns  in  two  weeks. 
Had  he  realized  his  expectations  he  would  have  reduced  the 
cost  of  the  wheat  to  him  in  Buffalo,  one  cent  per  bushel  of 
the  charges  in  Monroe  on  account  of  storage  for  the  winter, 


40 


Oo. 


40.000 
to 
at 


ao.  Oo. 


.72 

.45 

.03 

ofna. 


"      Gfntetett  on  $$700  fa  Y*  tnontt  .07 
"    Amount  to  Balance  (Gain)    . 


7200 

4500 

300 

343 

443 

.25 

187 


9700 


00 

00 
00 
50 
50 
37 

-?? 

00 


QUEST.  42.  —  What  was  lost  by  a  Grain  Speculator  in  the  Wheat  Account  here 
given? 

86 


"          cto.  6000          do. 

''   Amount  to  Balance  (Loss) 


3500 

5220 

1215 


9935 


00 
00 
00 


00 


the  insurance  against  fire,  and  5£  months  interest  — 

amounting  in  all  to $422.63 

And  his  receipts  would  have  been  greater  by  .  980.00 
Making  an  actual  difference  in  the  result  of .  .  $1402.63 
Hoping  to  gain  $187.63,  as  appears  from  his  figuring  below, 
before  engaging  in  the  enterprise,  he  actually  lost  $1215.00, 
as  appears  from  the  account  as  given  above. 


on  40,000 


.?7 


NOTE.  In  order  to  exhibit  this  account  complete 
on  one  folio,  the  Lake  Freight  and  Marine  Insurance  in 
the  opposite  entries  (which  are  the  same  as  in  the 
above  account)  are  combined;  also  the  charges  for 
Commission  and  Exchange. 


9700 


9700 


00 


00 


QUEST.  42.  What  had  he  hoped  to  gain  ?    What  difference,  and  how  made  up  ? 
*  37 


^6^©^     ^, 

4*59. 

/ 

cto. 

&fy*. 

20 

Q?o  y±  o/56  J3t>ad<i  <^ani 

*t*      .     .25 

3 

50 

G^ay- 

/ 

x/    3   QyJaud  *c/iowtna 

.      .   2.00 

6 

00 

0 

f                    f 

" 

2 

"     4      do.        e%att<WHMa    . 

& 

.      . 

4 

50 

» 

3 

/x    /%  do.       Q<wui,&K6na=oit£ 

.      .   4.50 

2 

25 

" 

5 

/x     4%  &$u,.    Gyeed  <~wowi> 

.      .     .50 

63 

" 

" 

"    4   £$ayo  gftant^p       . 

.      .      J5 

3 

00 

" 

20 

//    2     cto.       ^2u-&tvatvn,a 
(P 

.      .    4.50 

3 

00 

fate 

4 

"    2     do.               do. 

.      .    4.50 

3 

00 

" 

45 

//    2     do.       £ntowtna        . 

.      .    4.50 

3 

00 

&/tt. 

40 

/f    5%  do.        ^Zutttna  <z^^/(^ 

irSuKtetna  ./5 

4 

00 

@ct. 

40 

//r     £7C*Mn&n,a  and  £%Jindt4it 

*  dftutfit 

20 

00 

" 

" 

//     &u&tna  vnto   ^Ztite)     . 

•       - 

* 

00 

i£ 

/ 

x/     Q/nze4nvna  800  £$u>.  ^ 

^    .   .04% 

42 

00 

// 

45 

/x     GwuitKetwia  ofo.              do 

.  .04% 

42 

00 

" 

" 

"     Ofntetett  at  $20  fiez  Q4. 

^te      .       .07 

// 

20 

" 

" 

"    Profit  on  the  Crop 

. 

255 

92 

349 

00 

43.    The  profit  on  this  crop  of  Corn  is  very  great,  as  is 

shown  by  the  last  entry  on  the  Dr. 

side    of  the    account; 

but  then,  the  soil   that  produced  it  was  very  fruitful,  and 

required  but  a  small  amount  of  labor 

in  cultivation.     Corn, 

moreover,  usually  requires  twice  hoeing  ;  but  this,  which  was 

raised  on  the  River  Raisin,  in  Monroe 

county,  Michigan,  was 

not  hoed  at  all.     It  was  "cultivated"  between  the  rows,  in 

one  direction,  the  20th  of  May,  and  in 

the  other  direction  the 

QUEST.  43.    Here  is  presented  an  account  with 

a  crop  of  corn  of  eight  acres. 

What  is  the  profit  on  the  crop  ?     How  are  this  large  yield  and  consequent  profit 

accounted  for?    How  was  the  field  cultivated? 
36 

eda,    o 


{$59. 


cto.          cto. 


"    $00 


4.50 
4.00 


.40 


320 


00 

00 

00 


00 


1st  of  June ;  and  it  was  plowed  out  once  only,  without  hoe- 
ing, on  the  15th  day  of  the  latter  month.      This  mode  of 
I    culture,  and  this  yield,  are  common  in  the  new  States. 

44.  This  crop  was  debited  with  only  one-fourth  the  ex- 
pense of  manuring,  because  the  land  was  permanently 
enriched,  and  the  benefit  will  probably  be  realized  in  the 
next  three  crops  to  as  great  an  extent  as  in  this.  It  is  hence 
apparent  that  but  one-fourth  of  the  expense  of  enriching 
should  be  debited  to  this  crop. 


QUEST.  44.  Why  was  not  this  crop  debited  with  the  whole  expense  of  enriching? 

30 


<s% 

// 


nonet 


4.50 
2.00 
4.50 
0..00 


Q?o 


79 


cfo. 
50 
00 
00 
00 
00 


50 
IP 


45.  An  account  may  and  should  be  kept  with  Cash,  the 
same  as  with  an  individual,  as  in  the  above  example.     Per- 
sons who  have  a  limited  cash  deal  may  keep  their  Cash  Ac- 
count in  the  Ledger,  and  in  the  same  manner  they  do  their 
personal  accounts.     But  when  one's  cash  account  is  extensive, 
or  the  entries  in  it  become  frequent  and  numerous,  it  will  be 
best  to  keep  the  account  in  a  separate  Cash  Book  provided 
for  that  purpose,  which  should  be  balanced  at  the  close  of 
each  day.     In  opening  the  account,  Cash  should  be  debited 
with  the  a*nount  on  hand.     All  moneys  received  should  be 
entered  on  the  Dr.  side  of  the  Cash  account,  and  all  moneys 
paid  out,  on  the  Cr.  side  of  the  account.     In  balancing  the 
account,  Cash  should  be  credited  with  the  amount  on  hand. 
But  as  this  amount  is  not  paid  out,  it  is  here  entered   in 
different  type,  and  usually  in  red  ink,  to  denote  that  fact. 
Cash  is  then  debited  for  the  balance. 

46.  The  amount  on  hand  at  the  opening  of  an  account 
with  Cash,  together  with  the  sums  received  at  different  times, 

QUEST.  45.  How  may  an  account  be  kept  with  Cash?  When  may  the  Cash 
account  be  kept  in  the  Ledger  ?  When  should  a  separate  Cash  Book  be  provided  ? 
With  what  should  Cash  be  debited  on  opening  the  account  ?  What  entries  are  made 
on  the  Dr.  and  what  on  the  Cr.  side  of  the  account  ?  What  credit  should  be  made 
in  balancing  the  account?  Why  is  this  entry  made  in  different  type?  — 46.  What 
•mounts  should  be  equal  ?  What  do  the  Dr.  and  what  the  Cr.  entries  show  H 


.07 


7.00 


"     Balance  on  hand 


38 


cte. 
63 
70 
50 
00 
00 
67 


should  exactly  equal  the  amount  of  the  sums  paid  out  and 
the  cash  on  hand  at  the  time  of  balancing  the  account.  The 
Dr.  entries  show  what  Cash  has  been  received  for,  and  the 
Cr.  entries  show  what  Cash  has  been  paid  for. 

47.  The  first  entry  in  the  Cash  account  must  always  be 
on  the  Dr.  side ;  for  no  person  can  pay  out  money  unless  he 
first  has  it  on  hand.     It  is  likewise  apparent  that  the  credit 
entries  in  the  Cash  account  can  never  exceed  the  amount  of 
the  debit  entries.    When  these  are  exactly  equal,  there  can  be 
no  Cash  on  hand.     When  the  Dr.  side  of  the  account  amounts 
to  more  than  the  Cr.  side,  the  difference,  if  the  account  has 
been  correctly  kept,  will  exactly  equal  the  Cash  on  hand. 

48.  An  account  may  be  balanced  and  continued  on  the 
same  page,  or  two  accounts  may  be  kept  on  the  same  folio, 
as  in  the  following  examples,  according   to   circumstances. 
Whenever  a  folio  is  filled,  and  the  account  not  closed,  the  two 
sides  of  the  account  should  be  added  and  the  amount  carried  to 
some  other  folio  designated.   (See  example  on  the  next  folio.) 


QUEST.  47.  Where  must  the  first  entry  be  made  in  the  Cash  Account?  Whyf 
Can  the  credit  entries  ever  exceed  the  debit  entries  1  When  the  Dr.  side  amounts  to 
more  than  the  Cr.  side,  what  should  the  difference  be  equal  to  ?  —  48-  When  an  ac- 
count is  settled,  may  it  be  reopened  on  the  same  page  ?  May  two  accounts  be  kept  on  the 
lame  folio  ?  When  a  folio  is  filled  and  the  account  not  closed,  what  should  be  done  ? 
4*  41 


40 


/ 

cte. 

eTo  40  $4.   ^ffiuttet,      45 

/ 

so 

"    42   "         do  45 

/ 

$0 

"     45  gftu,.   ^ozn      40 

6 

oot 

6 

$0 

"    40  gfiu*/ie&  7%%xa        .       .       .$0 

32 

00 

"    Balance  to  new  acct.    .      .      . 

4 

72 

52 

da 

oTo  $  &f{M&s&  &o£afo&)  .       .       .       .40 

3 

20 

//     6         "              do  44 

2 

64 

"  $0         "         'W&xzt     .       .       .       .7$ 

62 

40 

//  45         //         ^otn         .       .       .      .35 

45 

75 

$3 

99 

<f$60. 


Q?o  2% 


"    40 


"  40 

/x  Q/>iv}nmvn>qL<) 

"  4 

ft  4^£    /' 


Amount  to  folio  9 


4.00 

9 

00 

2.30 

5 

75 

4 

25 

>*  .0$ 

3 

20 

40 

3 

05 

.34 

3 

40 

34 

.56 

2 

24 

.20 

30 

34 

50 

9 

42 


«      40 


/'      / 
"     40 
"      4 


,  34 


.06 


.09 


70 
50 
00 
40 
60 


63 
~99 


an, 


40 


SO 


.75 


See  this  account  at  the  73d  page, 
kept  by  the  Second  Form. 

Amount  to  folio  9 


45 


45 


00 


00 


40 


30 


/ 

Gfa. 

34 

56 

3TA 

75 

4.25 

20 

00 

4 

25 

.44 

3 

30 

.44 

4 

96 

.3  4V* 

63 

.35 

3 

50 

.34 

7 

44 

3.00 

42 

00 

.25 

$>9 

42 

25 

_gf 

49.  This  account  is  here  continued  from  the  preceding 
folio.     It  might  have  been  carried  'to  any  other,  as  well  as 
brought  here,  by  making  the  proper  entry  at  the  foot  of  the 
page  from  which  it  is  brought,  showing  th %  folio  upon  which 
it  is  continued. 

50.  The  books  of  the  Creditor  should  specify  every  item 
sold.     This  is  always  important,  and  especially  so  when  the 
entries  are  of  considerable  amount.     The  last  entry  on  the  Dr. 
side  of  this  account  with  H.  Van  Allen  is  hence  radically 
defective,  not  a  single  article  debited  being  specified.     The 
Bill,  if  purchased  by  any  other  person  than  himself,  may 
never  reach  him ;  or  if  it  does,  it  may  be  mislaid,  an'd  in  the 
settlement  it  may 'be   impossible   to   satisfy  him   that   this 
amount  has  ever  been  received  by  him,  or  on  his  account. 
The  Debtor  may  give  credit  for  goods  as  per  bill  received,  if 
he  choose  to  do  so,  as  in  the  case  of  a  "  Bill  of  Crockery  "  in 


QUEST.  50.  What  should  the  books  of  the  Creditor  specify  ?  What  of  the  last 
Dr.  entry  in  the  account  with  II.  Van  Allen  ?  May  the  Debtor  give  credit  in  his 
tooks  per  bill  received  ?  In  such  cases  what  should  be  done  with  the  bill  ? 


See  this  account  at  the  73d  page, 
kept  by  the  Second  Form. 


00 
30 


the.  account  with  John  Martin  on  the  last  folio,  and  as  is  twice 
dor*<3  in  the  account  with  Samuel  Adams — once  for  a  "  Bill  of 
Crockery,"  and  once  for  a  "  Bill  of  Goods  for  John  Bruce." 
But  even  in  such  cases,  to  prevent  any  occasion  for  difficulty, 
it  is  better  to  preserve  bills  until  the  accounts  are  settled. 

51.  If  on  the  Dr.  side  of  my  account  with  a  person,  I 
enter  "  To  Bill  of  Goods,"  and  carry  out  only  the  amount, 
he  may  not  give  me  any  credit  at  all,  and  on  settlement  he 
may  dispute  the  account,  and  I  may  then  be  unable  to  specify 
a  single  article  sold  him.  On  the  contrary,  if  I  enter  on  the 
Cr.  side  of  my  account  with  a  person,  "  By  Bill  of  Goods," 
and  give  the  amount,  I  thereby  acknowledge  the  receipt  of 
the  amount;  but  in  case  the  books  do  not  exactly  agree, 
tfifficulties  may  still  arise  in  the  settlement,  if  the  bill  is  not 
preserved  so  as  to  compare  items.  The  following  rule  should 
be  observed  for  Dr.  and  Cr.  entries : 


QUEST.  51.  Why  should  the  items  sold  be  specified  in  the  books  of  the  Creditoi; 
when  they  may  be  entered  per  bill  in  the  booka  of  the  Debtor  ? 

45 


GENERAL    BOOK-KEEPING. 


RULE  FOR  DR.  AND  CR.  ENTRIES. 

52.  The  Books  of  the  Creditor  should  specify  both  the 
quantity  and  the  value  of  every  article  sold.     The  Books  of 
the  Debtor  should  likewise  specify  both  the  quantity  and  the 
value  of  every  article  bought  by  him,  unless  bills  are  received 
of  goods  purchased,  which  is  always  preferable.  When  bills  are 
given,  the  holder  of  them  may  enter  the  amount  only  in  his 
account,  but  he  should  keep  the  bills  on  file  until  settlement. 

BILLS   OF  PARCELS. 

53.  A  BILL  OF  PARCELS  is  a  statement  of  goods  bought  or 
sold  at  one  time,  embracing  both  the  quantity  and  the  price 
of  each  article,  and  the  amount  of  the  whole.     If  paid  at  the 
time  of  purchase,  it  should  be  receipted  by  the  seller,  as  in 
the  first  example  on  the  opposite  page ;  if  paid  "  by  note,"  as  in 
the  second  example ;  and  if  "  charged  in  account,"  it  should  be 
entered  as  in  the  third  example. 

54.  In  case  goods  are  paid  for  in  money  when  purchased, 
it  is  sufficient  for  each  party  to  enter  the  transaction  in  his 
Cash  account.     But  even  then,  if,  there  is  a  personal  account 
between  the  parties,  the  merchant  should  debit  the  purchaser 
for  the  goods  sold,  and  credit  him  for  the  money  received. 

55.  When  payment  is  made  "by  note,"  the  merchant 
should  make  the  necessary  entry  under  the  head  of  Bills 
Receivable,  and  the  purchaser  under  the  head  of  Bills  Pay- 
able ;  and  in  case  there  is  an  account  between  the  parties 
the  whole  transaction  should  be  shown.     (Art.  54.)     But 

56.  When  a  bill  of  goods  is  "  charged  in  account,"  the 
merchant  should  simply  debit  the  purchaser  with  the  items 
sold,  which  should  be  credited  in  the  books  of  the  latter. 

QUEST.  52.  What  rule  is  given  for  making  Dr.  and  Cr.  entries?  — 53.  What  is  a 
bill  of  parcels?  — 54.  When  goods  are  paid  for  at  the  time  of  purchase,  what 
entries  should  be  made  in  the  books  of  each  party  ?  — 55.  Wlien  payment  is  made 
"by  note,"  what  entries  should  be  made?  — 56.  When  a  bill  of  goods  is  "charged 
in  account,"  what  entries  should  the  parties  make  in  their  books? 

46 


(1) 

** 


BILLS    OF   PARCELS. 


SO,    4$  60. 


.07       .       .       . 
05 


70 


3.75 


$6.00 


(3) 


90 


vn  Q^ccount, 
47 


40, 


3.80 


$4  00 


GENERAL    BOOK-KEEPING. 


ACCOUNTS  CURRENT. 

57.  An  ACCOUNT  CURRENT  is  a  record  of  the  unsettled 
transactions  between  the  parties  named  in  the  account,  com- 
prising both  debits  and  credits.  It  should  contain  a  list  of 
the  items  bought  and  sold,  together  with  their  prices,  and 
should  show  the  date  of  each  transaction ;  thus : 


</ 


Q/n  Q^tcct*   wt/w,       Zamed 
& 


</ 


JO 


SO 


/o 


45 


3   gPafieM  o/  gft 


40 


50 

•eto 
.45 
,20 
,40 

43 
.09 


Balance  due  me    . 

(Art.  33.) 


65 


63 


EXAMPLES  FOB  PRACTICE. 


58.  In  the  following  examples,  where  several  articles  of 
the  same  kind  are  bought  or  sold,  the  price  and  the  quantity 
are  given,  and  the  pupil  is  left  to  carry  out  the  amount, 
which  should  uniformly  be  done.  If  the  computations  are 
correctly  made,  the  accounts  will  exactly  balance. 


QUEST.  57.  What  is  an  account  current  ?    What  should  it  contain  and  show  ? 


EXAMPLES    FOR   PRACTICE. 


Za 


n   G^cct.   wti£  Qfi 


ia 


/an,. 


S$60. 

an. 


SO 


so 


//  6  cSs. 
"  7%  (So. 
"  S  c?C(>e,  /iet  4on 

/ 

"     S  <$cut£<M  and 


.50 
,S5 
S6 


ac. 
to  gfiafanee 


.0$ 


50 


S5 


SO 


.37 


"S3        do. 
"     60         a*. 


"     S6  do. 


4.50 
S.OO 


to 


33 


4$ 


60 


66 


59.  In  the  last  examplo,  the  credits  occurring  before  and 
exceeding  the  debits  are  placed  first  in  the  acct.  Both  exam- 
ples are  differently  arranged  under  the  Second  Form  of  Accts. 


49 


an 


cf 


No. 


Date. 


Milker's  Name. 


Iiidorscr's  Name. 


/fa 


2% 


n 


Q/twolrt 
v 

do. 


No. 


Date. 


Payee's  Name. 


Indorser's  Name. 


(ffii 


\to 

I / 
I/.'J  i 


& 
JF 


60.  The  term  BILLS  RECEIVABLE  includes  all  written 
obligations  for  the  payment  of  money  which  you  hold  against 
other  persons,  such  as  Promissory  Notes,  Due  Bills,  Orders, 
Drafts,  etc.  When  any  of  these  are  received  by  you,  they 
should  be  at  once  entered  under  the  head,  Bills  Receivable, 
noting  particulars,  after  which  they  may  be  placed  on  their 
proper  files.  Then,  by  referring  to  the  Bill  Book,  it  will  be 
easy  to  see  when  any  obligation  you  hold  against  anothei 
becomes  due,  where  it  is  payable,  etc.  You  thus  save  your- 
self the  trouble  of  examining  various  packages  of  papers, 
the  contents  of  which  are  here  noted.  Bills,  when  thus 
entered,  may  be  readily  referred  to  by  number.  Per.-:ons 
engaged  in  extensive  business  find  it  convenient  to  keep 
separate  Bill  Books ;  but  those  who  transact  a  limited  busi- 
ness may  require  only  a  folio  of  their  Ledger,  properly  ruled 


QUEST.  60.    What  are  Bills  Ueceivabla?      Where  should  Ihoy  bo  enteivd  when 
seceivtid,  and  why?    What,  then,  can  be  ascertained  by  referring  to  the  Bill  Book \ 


Where  Payable. 


\V1iea  Due. 


Amount. 


Remarks. 


(Mote 


dfiate 


45 
2<f 
20 
30 


60 
47 
25 


00 


@W«/ 

&ct.fane  f4, 
&U.fane  24,  S$6l 


aua 

# 


Where  Payable. 


When  Due.  '      Amount. 


Remarks. 


U 


<6> 

''? 


do. 


itne 

U> 


25 


20 
40 


25 


&ct.  fane  20,  4 $64 


61.  The  term  BILLS  PAYABLE  includes  all  written  obliga- 
tions for  the  payment  of  money,  of  whatever  kind,  given  by 
you  to  other  persons.    Whenever  you  give  such  an  obligation 
you  should  enter  the  particulars  in  the  Bill  Book.   It  is  of  the 
utmost  importance  to  note,  at  the  time,  at  least  the  amount  and 
when  due,  together  with  the  payee's  name  and  where  payable. 

62.  The  maker  of  a  note  (called  also  the  giver  or  drawer) 
is  the  person  who  gives  the  note,  and  who  must  sign  it.     The 
payee  of  a  note  is  the  person  to  whom  it  is  made  payable. 
The  place  where  a  note  is  payable  should  always  be  specified 
whenever  the  payee    (or  holder  of  the  note  at  the  time  it 
becomes  due)  does  not  expect  to  call  at  the  maker's  place  of 
business,  or  at  his  residence  for  payment.     (For  other  par- 
ticulars pertaining  to  Bills,  see  Arts.  159  to  171.) 

QUEST.  61.  What  are  Bills  Payable?  Where  should  they  be  entered  when  piven? 
What  should  be  especially  noted?  — 62.  Who  is  the  mater  of  a  note?  Who  the 
payee /  When  should  the  place  where  a  note  is  payable  bo  specified? 

61 


Of*. 


2, 


5,  "      £z,me<i  QJattow 


frs 

24 
60 


56 


00 


00 


SO 


to 


> 

do.      "      do.      do. 
Balance  (not  due) 


fO 
SO 
40 


100 


50 
00 

84 

~W 


63,  In  connection  with  the  general  statement  concerning 
Bills  Receivable  and  Bills  Payable,  presented  on  the  last 
folio,  it  will  be  found  convenient  to  keep  a  Dr.  and  Cr. 
account  with  each.     This  is  done  in  the  same  manner  that 
an  account  is  kept  with  an  individual,  or  with  Cash. 

64.  When  we  give  any  thing  for  a  Bill,  or  on  its  account, 
we  debit  it.     When  we  receive  any  thing  for  a  Bill,  or  on  its 
account,  we  credit  it.    The  first  entry  to  every  Bill  Receivable 
is  on  the  Dr.  side  of  the  account.     The  first  entry  to  every 
Bill  Payable  is  on  the  Cr.  side  of  the  account 


3.  How  may  a  Dr.  and  Cr.  account  be  kept  with  Bills  Receivable  and  Bills 
Pv  able?  —  04.  When  do  we  debit  a  Bill,  and  wKen  credit  it?  Where  ia  thajir* 
V\trj  to  Billf  KeceiFable,  and  where  to  Bills  Payable? 

62 


24 


c   . 
do. 


.    Q/dnai 


Balance  (unpaid) 


24 
60 


32 


SOS 


5$ 
75 
00 
00 
14 
39 


40 

4 

45 


.    4 ' ,   to      J&&n  (ffiiuce  (Art.  36.) 


3,   ft       do.        do. 

4     "     (~/!Z7as. 


Balance  vioutnt  down, 


S? 


40 


400 
~^0 


50 
00 

~5~9 


65.  The  account  exhibited  on  this  folio  is  based  upon 
transactions  recorded  upon  the  preceding  folio.     The  entry 
made  in  each,  under  date  Sept.  12,  1860,  relates  to  a  note 
given  to  John  Bruce  in  the  settlement  of  our  personal  account. 

66.  A  person  keeping  a  Dr.  and  Cr.  account  with  Bills 
Receivable  and  Bills  Payable,  can,  by  periodically  balancing 
these  accounts,  ascertain  what  amount  remains  unpaid  on  the 
obligations  he  holds  against  others,  and  whether  this  sum  is 
increasing   or  lessening  from  time  to  time;   also,  his  own 
indebtedness  on  account  of  notes  and  other  bills  payable,  and 
whether  it  is  increasing  or  diminishing  in  amount. 

QUEST.  65.   Upon  what  transactions  is  the  account  here  presented  based?  —  6& 
What  cau  a  person  keeping  such  an  account  at  any  time  ascertain? 
5*  53 


GENERAL    BOOK-KEEPING. 


GENERAL   SETTLEMENT. 

67.  A  General  Settlement  shows  how  a    lerson  stands 
with  the  world,  or  with  all  persons  with  whom  he  transacts 
business,  taken  collectively.     It  is  made  by  taking  an  inven- 
tory of  one's  property,  to  the  fair  value  of  which  he  must  add 
the  sum  of  the  balances  due  him  from  others  in  the  settlement 
of  his  personal  accounts,  and  the  balance  due  him  on  bills 
receivable.     From  the  total  amount  of  these  he  must,  deduct 
the  sum  of  the  balances  due  others  in  the  settlement  of  his 
personal  accounts,  together  with  the  balance  that  may  become 
due  from   him  on  bills  payable.     The   difference   of  these 
amounts  will  evidently  represent  his  exact  standing  with  all 
persons  with  whom  he  has  business  relations. 

68.  Such  general  settlements  should  be  made  at  the  end 
of  each  year,  immediately  after  one's  annual  settlements  take 
place.     By  comparing  the  result  of  each  general  settlement 
with  those  of  preceding  ones,  persons  can  readily  see  how 
much  they  have  gained  or  lost  during  the  past  year,  or  in  any 
given  number  of  years.     But  without  such  a  general  settle- 
ment it  is  impossible  for  persons  engaged  in  an  extensive 
debit  and  credit  business  to  possess  any  definite  knowledge 
of  their  exact  standing  with  the  world. 

69.  No  one  who  has  any  adequate  regard  for  his  own 
pecuniary  interests,  and  for  his  reputation  as  a  business  man, 
should  fail  to  make  such  a  settlement  at  the  close  of  every 
year's  business.     In  the  light  of  such  facts  as  would  thus  be 
thrown  upon  one's  business,  ultimate  success  is  almost  certain; 
while,  if  left  to  grope  his  way  as  it  were  in  the  dark,  he  not 
only  jeopards  success,  but  seems  even  to  court  a  failure. 

QUEST.  67.  What  does  a  General  Settlement  show  ?  How  is  a  General  Settlement 
made '  —  68.  When  should  such  a  settlement  be  made  ?  How  can  persons  ascertain 
what  they  have  gained  or  lost  daring  the  past  year,  or  in  any  number  of  years?  Can 
persons  possess  any  definite  knowledge  of  their  standing  with  the  world  without  such 
general  settlements  ?  —  69.  What  is  said  of  such  settlements  in  connection  with  one'i 
success  or  failure  in  business  ? 

64 


MEMORANDUM   BOOK. 


70.  When  a  perron's  indebtedness  exceeds  what  he  pos* 
sesses  and  what  is  due  him,  taken  together,  he  is  insolvent, 
and  is  sometimes  said  to  be  worse  than  nothing. 

MEMORANDUM  LOOK. 

71.  This  book,  whose  name  indicates  its  general  character, 
is  second  in  importance  to  the  Ledger  only.     In  it  should  be 
entered   every  thing  of  importance  relating  to  a  person's 
business  that  does  not  properly  belong  to  the  Ledger.     It 
will  often  contain  agreements,  the  carrying  out  of  which  will 
require  frequent  entries  in  the  Ledger,  as  is  illustrated  in  the 
case  of  John  Bruce,  whose  account  has  already  been  given 
at  pp.  3'2d  and  33d.     A  memorandum  of  my  agreement  with 
him  is  given  in  the  following  Memorandum  Book,  under  date 
Jan.  12th,  I860. 

72.  The  Memorandum   Book  should  commence  with  a 
general  inventory  of  one's  property.     It  should  contain  mem- 
orandums of  agreements  and  of  contracts  of  various  kinds. 
It  should  not  only  contain  a  general  statement  of  one's  busi- 
ness affairs,  but  in  it  every  important  particular  relating  to 
liis  business  which  he  ought  himself  to  remember,  or  which 
should  be  known  to  his  legal  representatives,  should  be  care- 
fully recorded. 

73.  All  business  engagements  of  importance  which  you 
make,  to  be  fulfilled  hereafter,  should  be  carefully  recorded 
in  this  book  at  the  time  they  arc  entered  into ;  and  when 
they  are  met,  a  brief  entry  should  be  made  in  the  space  left 
at  the  right,  stating  the  facts.     Where  the  engagement  is 
simple,  as  in  the  case  of  my  contract  with  Dr.  J.  Goodman, 
made  March  1 6th,  and  promptly  fulfilled,  it  is  not  necessary 

QUEST.  70.  When  is  a  person  raid  to  be  wr,r?e  Uian  nothing?  —  71.  What  i.«  paid 
of  the  importance  of  the  Memorandum  Book?  What  should  be  entered  in  it?  — 
72.  With  what  should  this  hook  commence,  and  what  should  !'•;  contain?  —  73 
When  should  engagements  be  recorded?  When  met,  what  entry  should  be  made? 
When  may  the  entries  relating  to  au  agreement  be  made  iu  the  Cash.  UooL  oiily,aud 
\vlit-tt  should  they  be  made  iu  cue's  personal  account! 

55 


GENERAL    BOOK-KEEPING. 


to  open  a  personal  account  with  him  in  the  Ledger.  It  is 
sufficient  to  debit  Cash  with  the  amount  received  of  him. 
But  in  case  the  contract  is  more  complex,  and  requires 
several  entries  to  be  made  at  different  times,  as  is  exempli- 
fied in  my  agreement  with  Jacob  Merchant,  made  Nov.  10th, 
it  becomes  necessary  to  open  a  personal  account  with  him  in 
the  Ledger,  where  all  transactions  relating  to  the  contract 
should  be  faithfully  entered. 

74.  Agreements  should  generally  be  made  in  writing, 
and  especially  when  much  time  is  to  elapse  before  their  ful- 
fillment, or  when  they  are  in  any  degree  complex.     "When 
this  is  not  practicable  it  is  desirable  to  make  agreements  in 
the  presence  of  witnesses,  as  in  case  of  the  engagement  to 
furnish  wood,  entered  into  Dec.   1st      In  such   cases  the 
memorandum  should  be  made  as  soon  after  the  agreement 
as  practicable,  while   all  the  particulars   are  fresh  in  the 
memory. 

75.  The  Memorandum  Book  should  be  frequently  re- 
viewed to  see  what  contracts,  if  any,  remain  to  be  fulfilled, 
when  the  proper  entries  should  be  made  opposite  such  as 
have  been  performed.     In  cases  like  that  entered  under  date 
Dec.  4th,  the  reserved  space  may  be  filled  at  the  time  the 
entry  is  made.     It  will  generally  be  advisable,  and  especially 
in  case  your  circumstances  are  much  changed,  to  make  out 
a  general  inventory  of  your  property  at  the  commencement 
of  each  year. 

76.  In  case  of  a  limited    business,  the    Memorandum 
Book,  like  the    Cash  Book  and  Bill  Book,  may  be   kept 
in  the  Ledger ;  but  it  will  generally  be  preferable  to  keep 
it  in  a  separate  book,  after  the  manner  of  the  one  hereto 
annexed. 


QUEST.  74.  When  should  agreements  be  made  in  writing?  When  not  in 
wiiting,  how  may  they  be  made?  —  75.  Why  should  the  Memorandum  Boole  be  fre- 
quently reviewed?  How  often  should  a  general  inventory  bo  made?  —  76.  How 
should  the  Memorandum  Book  be  kept? 

56 


MEMORANDUM   BOOK 

—  .  -  ,  —  ~~"\ 

GENERAL    INVENTORY    OF    MY    PROPERTY. 

January  1st,  1860. 
77.  Value  of  Farm,  including 
Buildings  and  Fixtures    .     .    4400.00 
Value  of  Timber  Lot      .     ...      850.00 
do.       Teams   and  Agricul- 
tural Implements    ....      475.00 
Stock  of  Cattle      875.00 

do.      Sheep      500.00 

The  increase  of 

Cash  on  hand    80.75 

my  property   since 

Note  against  Peter  York     .     .        84.00 
do.      do.      Ira  Butts    .'    .     .        15.75 
Win.  Williams  owes  me  on  Acct.        84.00 
Oren  Olds          do.          do.                15.00 

Jan.  1st,  1859,  has 
been  $450.81. 
My  business  is  in 
a  more  prosperous 

Total  Value  of  Property     .     .  $7379.50 

/  Owe  as  Follows  : 
On  Timber  Lot    .     .     150.00 
J.  Olds  on  Note    .     .       14.75 
H.  Brown  on  Acct.  .       12.50 
O.  Hyde         do.        .         2.25       179.50 

state  than  ever  be- 
fore,  for   which    I 
have    great  reason 
to  be  thankful. 

Net  Capital  this  Day   .     .          $7200.00 
itk 

Engaged  to  furnish  J.  Bronson  with  10 
Ibs.  of  Butter  a  week  for  family  use  till 
May  1st,  for  15  cents  a  pound,  to  be  paid 
for  in  cash  as  delivered. 

Qth 

May  1st,  engage- 
ment  fulfilled    and 
new    one     entered 
into  this  day. 

Commenced  trading  with  H.  Van  Allen, 
who  is  to  take  my  Wheat  at  cash  price 
when  delivered;  likewise  the  crop  now 
on  the  ground.     For  particulars  see  writ- 
ten agreement  of  this  date. 

67 

Contract  fulfilled 
and  account  settled, 
Dec.  29th,  1860 

GENERAL    BOOK-KEEPING. 


January  12th,  1860. 
John  Bruce  commenced  work  on  farm 
this  day,  for  8  months,  on  conditions  fully 
set  forth  in  our  written  contract.  For  the 
first  three  months  I  am  to  give  him  $10 
per  month,  and  for  the  remaining  5  months  at 
$11  per  month.  I  am  to  give  him  what 
store  pay  he  wants,  from  time  to  time, 
never  exceeding  his  earnings,  and  to  give 
him  my  note  on  settlement  for  any  balance 
that  may  remain  due,  payable  by  the  mid- 
dle of  November  next. 


Mar.lQth. 


Engaged  to  furnish  Dr.  J.  Goodman 
with  95  pounds  of  Maple  Sugar,  to  be 
paid  for  on  delivery  at  12  cents  per  pound. 


-April  15th.- 


Agreed  with  James  Underbill  to  plant 
sixteen-acre  lot  (No.  7)  to  corn,  on  con- 
ditions fully  set  forth  in  contract  this  day 
made. 

May  1st. 


Contracted  to  supply  J.  Bronson  with 
Butter  for  family  use  till  Oct.  1st,  at  12 
cents  per  pound.  I  have  also  agreed  to 
let  him  have  all  the  Cheese  from  my  dairy, 
as  the  same  shall  become  merchantable,  to 
be  paid  for  on  delivery,  at  $6  per  100  Ibs. 


•Uth.- 


Engaged  to  put  sixteen  tons  of  hay,  well 
cured  and  in  good  condition,  into  Stephen 
Wakeland's  barn  by  the  15th  of  July,  to 
be  paid  for  1st  Sept.  at  $7.25  per  ton. 

68 


Settled  Sept.  12th, 
and  gave  my  note  to 
balance  for  $29.25, 
sixty  days. 
Paid  note    Nov. 
12th.   Bruce  wishes 
to  work  for  me  next 
season. 
(See  Arts.  36&  65.) 


All  delivered  and 
paid  for,  April  20th. 


All  obligations 
satisfactorily  met 
Nov.  10th,  1860. 


Contract  fulfilled 
Nov.  1st,  1860. 


Engagement  met 
and  pay  received 
Sept.  1st,  1860. 


MEMORANDUM   BOOK. 

June  Itli,  18  GO. 
Employed  Harriet  Benson  to  do  house- 
work for  13  weeks,  at  $1.25  per  week. 

i9/>«/    1  r)f7i 

Wages  paid  and 
she  left,  Oct.  9th. 

Harriet  Ann  lias  this  day  entered  upon 
her  duties  as  First  Assistant  in  the  Union 
School,  at  $15  per  month,  or  $45  per 
quarter  of  twelve  weeks. 

u 

Succeeded    well. 
Wages  paid  Jan  1, 
1861. 

Henry  and    Frances    have    this   day 
commenced  attending  the  Union  School 
for  the  winter  term. 

Nov   Wth 

They  left  school 
March  1st,  1861. 

Purchased  groceries  for  the  winter  of 
Jacob  Merchant,  to  whom  I  have  con- 
tracted 800  bushels  of  corn  at  40  cents 
per  bushel,  the   balance  due  me  to  be 
paid   in   cash  when   the  full  amount   is 
delivered. 

T)cr    1  ?/ 

All  engagements 
discharged.       Nov. 
20th^860. 

Engaged  to  furnish  Ira  Wilson  with 
20  cords  of  Hickory,  at  $1.50  a  cord,  to 
be  delivered  at  his  house  by  the  15th  of 
January,  and  to  be  paid  for  by  the  10th 
of  April.      Present,  Hiram  Wilson  and 
Jacob  Townsend. 

itlt 

Obligations  met. 
April  12th,  1861. 

Mill-dam  carried  away  by  a  freshet, 
and  mill  much  injured. 

59 

Loss  $140.00. 

GENERAL    BOOK-KEEPING. 


EXAMPLES  POU  PBACTICE. 

FIRST  FORM   OF  ACCOUNTS. 

78.  Examples  for  Practice  are  introduced  into  this  work 
to  enable  the  pupil  to  reduce  to  practice  the  knowledge  of 
Book-keeping  which  he  has  already  acquired.     Each  exam- 
ple in  the  First  Form  of  Accounts  consists  of  several  transac- 
tions with  the  same  individual,  which,  taken  together,  consti- 
tute a  separate  account,  that  should  be  opened,  conducted, 
and  closed,  as  in  the  case  of  examples  already  given. 

79.  For  the  purpose  of  solving  these  examples,  the  pupil 
should  procure  the  necessary  quantity  of  paper,  ruled  accord- 
ing to  the  instructions  given  at  the  25th  page,  (Art.  28 ;)  or 
he  may  make  the  perpendicular  rulings  himself.     If  the  com- 
putations are  correctly  made,  and  the  transactions  are  rightly 
entered,  the  last  entry  in  the  account  will  agree  with  the 
answer  given  after  the  last  transaction  in   each   example. 

80.  After  each  example  has  been  solved,  and  the  account 
has  been  accurately  made  out  and  properly  balanced,  the 
pupil  will  do  well  to  copy  his  work  neatly  into  Account  Book 
No.  1,  which  has  been  prepared  to  accompany  this  volume, 
or  into  some  other  suitable  book  provided  for  that  purpose. 

EXAMPLE   I. 

81.  This  example  consists  of  a  series  of  transactions  be- 
tween the  Book-keeper  (each  pupil  may  suppose  himself  or 
herself  the  person)  and  Asa  P.  Leonard,  a  country  merchant. 

NOTE.  The  Student  will  do  well  to  carefully  review  the  suggestions  addressed  to 
him  on  the  7th  pago  before  proceeding  further.  The  young  Teacher,  also,  may  bo 
aided  by  the  suggestions  addressed  to  him  on  the  9th  page. 


QUEST.  78.  Why  are  examples  for  practice  introduced  into  this  work?  Of  what 
does  each  example  consist,  and  how  should  it  be  treated  ?  —  79.  What  suggestion  is 
given  for  the  pupil  ?  How  may  j'ou  know  whether  the  computations  are  correctly 
made,  and  the  transactions  rightly  entered  ?  —  80.  What  suggestion  is  made  in  relh. 
tion  to  the  use  of  Account  Books  ?  —  81.  Of  what  does  the  first  example  given  in  the 
first  form  of  accounts  consist  I  What  may  each  pupil  suppose  himself? 


EXAMPLES    FOR   PRACTICE. 


Transaction  1.  Jan.  4,  1860.  I  have  sold  Asa  P.  Leon- 
ard one  quarter  of  Beef,  weighing  150  Ibs.  for  five  cents  a 
pound.  I  have  received  in  partial  payment  2  Ibs.  of  Black 
Tea  at  70  cents  a  pound;  4  Ibs.  of  Coffee  at  14  cents  a 
pound;  and  25  Ibs.  of  Brown  Sugar  at  10  cents  a  pound. 

Tr.  2.  Jan.  25.  I  have  bought  of  Asa  P.  Leonard  three 
gallons  of  Molasses  at  forty-four  cents  a  gallon. 

Tr.  3.  Feb.  10.  Sold  him  40  Ibs.  of  Pork  worth  eight 
cents  a  pound.  Received  of  him  forty  dollars  in  Cash. 

Tr.  4.  Feb.  15.  I  have  sold  him  fourteen  bushels  of 
Corn  at  forty-five  cents  a  bushel. 

Tr.  5.  May  10.  I  have  plowed  his  Garden,  for  which  3 
am  to  receive  one  dollar  and  seventy-five  cents. 

Tr.  6.  May  15.  I  have  sold  him  eighteen  bushels  of 
Potatoes  at  thirty-five  cents  a  bushel. 

Tr.  7.  June  12.  Sold  him  250  Ibs.'  of  Wool  at  forty 
cents  a  pound.  Received  of  him  18  yards  of  Calico  at  15 
cents  a  yard,  and  three  papers  of  pins  at  five  cents  each. 

Tr.  8.  July  12.  Have  done  two  days'  Work  with  Team, 
for  which  I  am  to  receive  one  dollar  and  seventy-five  cents  a  day. 

Tr.  9.  Nov.  1.  I  have  pastured  his  Cow  fourteen  weeks, 
for  which  he  is  to  pay  me  20  cents  a  week. 

Tr.  10.  Dec.  4.  I  have  this  day  finished  drawing  him 
twenty-four  cords  of  Beech  and  Maple,  for  which  I  am  to 
receive  one  dollar  and  fifty  cents  a  cord.  I  have  bought  of 
him  one  pair  of  Kip  Brogans  for  $1.25 ;  18  Ibs.  of  Rice  at 
six  cents  a  pound;  9  Ibs.  Loaf  Sugar  at  14  cents  a  pound; 
and  9  yards  of  Merrimack  Sheeting  at  9  cents  a  yard. 

Tr.  11.  Dec.  29.  I  have  this  day  settled  with  him  and 
received  the  balance  due  me  hi  Cash.  What  will  be  my  last 
credit  entry?  Ans.  $114.32. 


NOTE.    The  solution  of  this  example  is  given  on  the  6th  nnd  7th  pages  of  the  Key. 

To  find  tho  solution  of  any  other  exr.mple,  look,  as  in  this  case,  immediately  under  the 

title  of  the  account,  in  the  Key,  for  the  page  or  pages  upon  which  the  example  is 

recorded  in  tho  Book -keeping,  which  are  there  given  in  the  same  type  with  this  Note. 

6  61 


GENERAL   BOOK-KEEPING. 


EXAMPLE   II. 

82.  This  example  consists  of  a  series  of  transactions  with 
O.  D.  Knowlton,  a  saddle  and  harness  maker. 

Transaction  1.  Jan.  4,  18GO.  Sold  O.  D.  Knowlton 
eight  bushels  of  Potatoes  at  thirty-five  cents  a  bushel,  and 
four  bushels  of  Corn  at  forty-two  cents  a  bushel. 

Tr.  2.  Feb.  10.  Sold  him  ten  bushels  of  Potatoes  for 
thirty-live  cents  a  bushelj  and  twelve  bushels  of  Wheat  at 
eighty-seven  and  a  half  cents  a  bushel. 

Tr.  3.  May  1.  Sold  him  sixteen  pounds  of  Butter  at 
twelve  and  a  half  cents  a  pound.  Bought  of  him  one  set  of 
Double  Harness,  valued  at  thirty  dollars. 

Tr.  4.  May  6.  Sold  him  fourteen  bushels  of  Corn,  for 
which  he  is  to  pay  me  forty-five  cents  a  bushel. 

Tr.  5.  June  10.  Sold  him  four  bushels  of  Potatoes  at 
thirty-five  cents  a  bushel.  Also,  bought  of  him  one  Brass 
Plated  Single  Harness,  at  thirty-live  dollars. 

Tr.  6.  July  2.  Bought  of  him  one  Saddle,  Bridle,  and 
Martingale,  the  whole  for  eighteen  dollars  and  fifty  cents. 

Tr.  7.  July  10.  I  have  sold  him  ten  tons  of  Hay  at  four 
dollars  and  twenty-five  cents  a  ton. 

Tr.  8.  Sept.  25.  I  have  pastured  four  Cows  for  him  ten 
weeks,  for  which  I  am  to  receive  twenty  cents  a  week  for 
each  Cow ;  also,  one  Horse  nine  weeks,  at  twenty-five  cents 
a  week.  We  this  day  settle,  and  I  pay  him  the  balance  due 
him  in  Cask.  How  much  do  I  pay  him  ?  Ans.  $2.57. 

EXAMPLE   III. 

83.  This  example  consists  of  a  series  of  transactions  with 
Isaac  Mitchell,  who  keeps  a  boot  and  shoe  store. 

Transaction   1.     Jan.   1,  I860.     I  have  bought  of  Isaac 


Qur.r-T.  82.   Of  what  does  the  second  example  consist  ?  — 83.  Of  what  does  tha 
third  example  consist  ? 

C2 


EXAMPLES    FOR    PRACTICE. 


Mitchell  one  pair  of  Kip  Boots  for  three  dollars,  and  one 
pair  of  Buffalo  Over  Shoes  at  two  dollars  and  fifty  cents. 

Tr.  2.  Jan.  10.  I  have  sold  him  two  and  a  half  dozen 
liens'  Eggs  at  fourteen  cents  a  dozen. 

Tr.  3.  Feb.  10.  Have  sold  him  four  pounds  of  Butter 
at  15  cents  a  pound,  and  two  bushels  of  Wheat  at  75  cents 
a  bushel.  Have  bought  of  him  one  pair  of  India  Rubber 
Over  Shoes  for  $1.25,  and  one  pair  of  Buckskin  Mittens  for 
75  cents. 

Tr.  4.  March  4.  Have  sold  him  one  quarter  of  Beef, 
weighing  175  Ibs.,  for  5  cents  a  pound.  Have  bought  of  him 
one  pair  of  Congress  Gaiters  for  $3.00 ;  two  pairs  of  Misses' 
Gaiters  at  $1.25  each;  and  two  pairs  of  Children's  Gloves  at 
15  cents  a  pair. 

Tr.  5.  May  14.  Have  sold  him  18  Ibs.  of  Wool  for  30 
cents  a  pound,  and  14  Ibs.  of  Butter  at  11  cents  a  pound. 
Bought  of  him  two  pair  of  R.  R.  Jenny  Linds  at  $1.25  a 
pair;  one  pair  of  Enameled  Gaiters  at  $2.50;  and  six 
Linen  Handkerchiefs  at  GO  cents  each. 

Tr.  6.  June  5.  Have  bought  of  him  two  pairs  of  Boys' 
Suspenders,  at  15  cents  a  pair,  and  three  pairs  of  Mixed 
Half  Hose  at  twenty  cents  a  pair. 

Tr.  7.  June  10.  Have  bought  of  him  one  Leghorn  Hat 
for  $1.50;  two  pairs  of  Calf  Buskins  for  $1.00  a  pair;  and 
three  pairs  of  Black  Cotton  Hose  at  25  cents  a  pair.  I  have 
this  day  settled  my  account  with  Mitchell  and  paid  him  the 
amount  due.  What  was  it?  Ans.  $8.91. 

EXAMPLE   IV. 

84.  This  example  exhibits  a  Sheep  and  Wool  Account. 
In  this  account  the  cost  of  the  sheep,  and  every  thing  paid 
out  on  their  account,  should  be  entered  on  the  Dr.  side.  On 
the  Cr.  side  of  the  account  should  be  entered  every  thing  that 


QUEST.  84.    What  does  the  fourth  example  exhibit  ? 
C3 


GENERAL    BOOK-KEEPING 


is  received  on  account  of  the  sheep,  including  the  value  of 
wool  on  hand,  surviving  sheep,  and  lambs. 

Transaction  1.  June  1,  1859.  I  have  bought  one  hun- 
dred and  sixty  Sheep  at  one  dollar  and  twenty-five  cents  a 
head,  for  which  I  have  paid  the  cash. 

Tr.  2.  Dec.  15.  The  Sheep  have  been  in  pasture  since 
their  purchase  for  six  and  one  half  months.  Pasturing  is  es- 
timated at  three  dollars  a  month  for  one  hundred  Sheep,  and 
at  the  same  rate  for  any  greater  number. 

Tr.  3.  March  15,  1860.  The  Sheep  have  been  fed  on 
hay  for  three  months.  Feed  and  care  are  estimated  at  $12.00 
a  month  for  one  hundred  Sheep,  and  are  computed  at  the  same 
rate  for  a  greater  number. 

Tr.  4.  June  1.  The  Sheep  have  been  in  pasture  since 
March  15th,  at  the  rates  specified  in  the  second  transaction. 
Washing  and  shearing  have  cost  me  at  the  rate  of  $6.00  for 
100  Sheep.*  I  have  cut  from  the  flock  six  hundred  pounds 
of  Wool  worth  forty  cents  a  pound.  There  are  one  hundred 
and  fifty-two  old  Sheep  living,  worth  one  dollar  and  twenty- 
five  cents  a  head,  and  sixty-four  Lambs,  worth  seventy-five 
cents  each.  What  must  be  entered  on  the  Dr.  side  in  closing 
the  account,  as  the  profit  on  one  hundred  and  sixty  Sheep  for 
one  year?  Ans.  $153.60. 

EXAMPLE   V. 

85.  The  fifth  and  sixth  examples  consist  of  a  series  of 
transactions  with  Henry  Webster,  a  bookseller  and  stationer. 
The  account,  which  was  settled  July  10th,  was  reopened  the 
10th  of  September.  If  the  sixth  example  is  entered  on 
the  same  folio  with  the  fifth,  the  name  of  Henry  Webster 

*  This  account  should,  under  this  date,  be  debited  with  the  interest  on  the  cost  of 
one  hundred  and  sixty  sheep  for  one  year,  which  is  computed  at  seven  per  cent. 


QUEST.  84.   What  should  be  entered  on  the  Dr  side  of  this  account?   What  on  th« 
Cr.  side?  —  85.  Of  what  do  the  fifth  and  sixth  examples  consist? 

64 


EXAMPLES   FOK   PRACTICE. 


need  not  be  written  the  second  time,  but  the  account  may  be 
reopened,  after  the  manner  of  the  continuation  of  the  account 
with  John  Martin,  as  given  at  the  42d  and  43d  pages. 

Transaction  1.  Jan.  1,  1860.  I  have  sold  Henry  Web- 
ster 15J-  Ibs.  of  Butter  for  14  cents  a  pound,  and  25  Ibs.  of 
Cheese  at  8  cents  a  pound.  I  have  bought  of  him  one 
Family  Bible  at  $3.00;  one  Webster's  Dictionary  at  $3.50; 
and  one  copy  of  Mayhew  on  Education  for  $1.00. 

Tr.  2.  Jan.  5.  Sold  Henry  Webster  forty  pounds  of 
Butter  at  fourteen  cents  a  pound. 

Tr.  3.  Jan.  10.  Bought  of  him  one  Thomson's  Higher 
Arithmetic  for  75  cents ;  one  Smith's  Arithmetic  for  50  cents; 
and  two  Tower's  Intellectual  Algebra,  at  37£  cents  each. 

Tr.  4.  June  4.  Sold  him  ten  pounds  of  Linen  Eags  at 
four  cents  a  pound.  Bought  of  him  four  quires  of  Writing 
Paper  at  20  cents  a  quire ;  two  Tower's  Gradual  Reader  at 
25  cents  each ;  and  two  copies  of  Webster's  Spelling  Book 
at  ten  cents  each. 

Tr.  5.  July  1.  Sold  him  10  pounds  of  Butter  at  10  cents 
a  pound,  and  4  doz.  Hens'  Eggs  at  8  cents  a  dozen.  Bought 
of  him  one  Wells'  Grammar  at  38  cents,  and  two  copies  of 
Thomson's  Practical  Arithmetic  at  38  cents  each. 

Tr.  6.  July  10.  Settled  and  paid  the  amount  due  him 
in  cash.  How  much  was  it  ?  Ans.  $0.65. 

EXAMPLE   VI. 

86.  This  example  consists  of  a  series  of  transactions  with 
Henry  Webster,  the  bookseller  and  stationer  named  in  the 
last  preceding  example.  (See  Art.  85.) 

Transaction  1.  Sept.  10,  1860.  Sold  Henry  Webster 
25  bushels  of  Potatoes  at  30  cents  a  bushel,  and  ten  pounds 
of  Butter  at  12£  cents  a  pound.  Bought  of  him  two  quires 


QUEST.  86.    If  the  account  with  an  individual  is  settled  and  balanced,  and  subse. 
quently  reopened  on  the  same  folio,  is  it  necessary  to  write  his  name  the  second  time  ? 
6*  65 


GENERAL    BOOK-KEEPING. 


of  Writing  Paper  at  25  cents  each ;  one  Ackerman's  Natural 
History  lor  50  cents ;  and  one  Day  Book  and  one  Ledger, 
each  containing  five  quires  of  paper,  at  34  cents  a  quire. 

Tr.  2.  Nov.  1.  Bought  of  him  one  Thomson's  Higher 
Arithmetic,  one  Davif  s'  University  Arithmetic,  and  one  Per- 
kins' Higher  Arithmetic,  at  seventy-five  cents  each. 

Tr.  3.  Nov.  10.  Bought  of  him  one  Smith's  Astronomy 
for  seventy -five  cents,  and  two  copies  of  Guernsey's  History 
of  the  United  States  at  sixty-two  and  a  half  cents  each. 

Tr.  4.  Dec.  12.  Finished  drawing  twenty  cords  of  Beech 
and  Maple  at  two  dollars  and  twenty-five  cents  a  cord. 

Tr.  5,  Dec.  15  Bought  4  quires  of  Writing  Paper  at 
20  cents,  and  one  Sons  of  Temperance  Offering  for  $2.25. 

Tr.  6.  Dec.  20.  Bought  one  North  American  Second 
Class  Reader  for  50  cents;  one  Ivory  Folder  for  19  cents; 
incl  one  Box  of  Wafers  for  six  cents.  Settled,  and  received 
the  balance  due  me  in  Cash.  How  much  was  it  ? 

Ans.  $41.30. 

EXAMPLE   VII. 

87.  The  seventh  example  exhibits  a  Pork  Account,  and 
the  eighth  a  Beef  Account.  The  entries  are  to  be  made 
according  to  the  principles  stated  under  the  fourth  example, 
and  more  fully  elucidated  under  the  account  with  a  Wheatfield, 
given  at  the  34th  and  35th  pages.  (See  Arts.  39  and  84.) 

Transaction  1.  Sept.  10,  I860.  I  have  bought  forty-five 
Hogs  weighing  9856  Ibs.  at -three  cents  a  pound. 

Tr.  2.  Sept.  15.  I  have  bought  17  Hogs  weighing  4180 
Ibs.  at  2£  cents  a  pound.  I  have  bought  for  their  feed  900 
bushels  of  Corn  at  forty  cents  a  bushel. 

Tr.  3.  Oct.  25.  Paid  six  cents  a  bushel  for  moving  and 
Binding  280  bushels  of  Corn,  to  be  used  for  feed. 


QUEST.  G7.  What  do  the  seventh  r.nd  eighth  examples  exhibit?  In  these  and 
jmllnr  accounts,  her  :  are  wo  to  clctermiuo  what  transactions  to  eater  on  tlio  JUr.  and 
That  oil  the  Cr.  side  c T  ths  account  ? 

06 


EXAMPLES    FOR   PRACTICE. 


Tr.  4.  Dec.  10.  The  expense  of  slaughtering  sixty-two 
Hogs  may  be  estimated  at  seventy-five  cents  each. 

Tr.  5.  Dec  11.  I  have  laid  by  for  family  use  750  Ibs. 
of  Pork  which  is  worth  five  cents  a  pound. 

Tr.  6.  Dec.  12.  The  expense  of  marketing  62  Hogs  is 
estimated  at  20  cents  each.  I  have  sold  18,650  Ibs.  of  Pork 
for  five  cents  a  pound.  What  has  been  the  profit  on  fattening 
sixty-two  Hogs  ?  Ans.  £123.67. 

EXAMPLE   VIII. 

88.  This  example  exhibits  the  particulars  of  r.  Beef  Ac* 
count.  (For  instructions  see  Arts.  39  and  84.) 

Transaction  I.  July  20,  1859.  Bought  twenty-one  Yoke 
of  Oxen  at  sixty-eight  dollars  a  yoke. 

Tr.  2.     Aug.  4.     Bought  15  Cows  at  twelve  dollars  r,  head. 

Tr.  3.     Aug.  10.     Bought  22  Cows  at  $12.50  n  head. 

Tr.  4.     Aug.  20.     Bought  23  Steers  at  $20.00  ::  head. 

Tr.  5.  Nov.  1.  The  pasturing  up  to  this  time  is  estimated 
at  eleven  weeks  for  all  of  the  cattle,  (some  have  been  kept 
longer  and  others  not  so  long,)  and  at  twelve  cents  a  week 
per  head.  They  have  up  to  this  time  been  fed  one  hundred 
loads  of  pumpkins  worth  50  cents  a  load. 

Tr.  6.  Feb.  1,  1860.  Have  fed  one  hundred  tons  of  hay 
worth  four  dollars  and  fifty  cents  a  ton ;  also  1800  bushels  of 
corn  worth  thirty-five  cents,  and  have  paid  for  grinding  the 
same  five  cents  a  bushel.  Have  this  day  sold  the  whole,  at 
the  following  prices :  Twenty-one  yoke  of  Oxen,  each  Ox 
weighing  980  Ibs.,  at  five  cents  a  pound ;  thirty-seven  Cows 
at  an  average  weight  of  600  Ibs.  for  four  and  one  half  cents 
u  pound ;  and  twenty-three  Steers  weighing  700  Ibs.  each, 
at  five  cents  a  pound.  What  has  been  the  profit  on  fattening 
Beef:'  .  Am.  $164.36. 


KOTS,    For  the  advantages  attendant  upon  keeping  this  class  of  accounts  see  Arts 
59  and  40.    See  also  the  Note  on  the  71st  page. 

07 


GENERAL    BOOK-KEEPING. 


EXAMPLE   IX. 

89.  This  example  consists  of  a  series  of  transactions  with 
F.  M.  Granger,  a  saddle  and  harness  maker. 

Transaction  1.  Jan.  4,  1860.  Bought  of  him  one  com- 
mon one-half  tug  Harness  for  $16.00 ;  three  common  Halters 
at  75  cents  each ;  and  two  common  Bridles  at  75  cents  each. 

Tr.  2.  Jan.  10.  Sold  him  ten  cords  of  Wood  for  $2.25 
a  cord,  and  18  bushels  of  Potatoes  at  30  cents  a  bushel. 

Tr.  3.  Jan.  25.  Sold  him  20  Ibs.  of  table  Butter  for 
which  he  is  to  pay  me  fourteen  cents  a  pound. 

Tr.  4.  Feb.  10.  Sold  him  eighteen  bushels  of  Wheat  at 
one  dollar  and  thirty-eight  cents  a  bushel. 

Tr.  5.  Feb.  26.  Have  this  day  delivered  to  him  25  Ibs. 
table  Butter  at  fifteen  cents  a  pound. 

Tr.  G.     March  4.     Sold  him  2  tons  of  Hay  at  $4.50  a  ton. 

Tr.  7.  March  22.  Have  this  day  delivered  to  him  10 
bushels  of  Potatoes  at  thirty-five  cents  a  bushel. 

Tr.  8.  April  10.  Bought  of  him  one  common  Saddle  at 
$7.00 ;  one  quilted  Saddle  at  $25.00 ;  and  one  pair  of  Mar- 
tingales at  seventy-five  cents. 

Tr.  9.  June  6.  Bought  of  him  one  Buggy  Harness, 
black  trimmings,  at  $20.00 ;  one  common  Single  Harness  for 
$13.00 ;  and  two  Bridle  Halters  at  $1.20  each. 

Tr.  10.  June  10.  Sold  him  10  bushels  of  Wheat  at  one 
dollar  and  forty  cents  a  bushel. 

Tr.  11.  July  2.  Bought  of  him  one  Plated  Buggy  Har- 
ness for  $25.00,  and  one  light  Double  Harness  with  Turrets 
and  Hooks,  for  $30.00.  Have  done  for  him  four  days'  work 
with  team,  worth  $2.00  a  day.  - 

Tr.  12.  July  24.  Have  pastured  two  Cows  for  him  12 
weeks,  at  20  cents  per  week  for  each  Cow. 

Tr.  13.  Nov.  15.  Have  had  Collars  repaired  for  thirty* 
eight  cents,  and  bought  a  Throat-latch  for  twenty  cents. 

63 


EXAMPLES    FOR   PRACTICE. 


Tr.  14.  Nov.  25.  Have  furnished  him  10  bushels  of 
Wheat  at  $1.38  a  bushel;  80  Ibs.  of  Butter  at  14  cents  a 
pound ;  and  75  Ibs.  of  Cheese  at  7  cents  a  pound.  Bought 
of  him  one  Hard  Leather  Trunk  for  twenty  dollars. 

Tr.  15.     Dec.  1.     Sold  him  4  tons  of  Hay  at  $5.00  a  ton. 

Tr.  16.  Dec.  20.  He  has  trimmed  my  Buggy  for  which 
I  am  to  pay  him  $18.00,  and  repaired  a  Buggy  Harness  for 
$2.25.  I  have  bought  of  him  one  Long  Tug  Harness  for 
$24.00,  and  one  Bridle  Halter  for  $1.20. 

Tr.  17.  Dec.  30.  Have  this  day  settled  with  him  and 
paid  him  $10.09  in  Cash,  and  given  him  my  Note  to  balance, 
at  thirty  days.  What  was  the  face  of  the  Note  ? 

Ans.  $50.00. 

EXAMPLE   X. 

90.  This  example  relates  to  a  Field  of  Oats  of  Five 
Acres.  The  account  is  kept  in  all  respects  like  that  with  a 
Wheatfield,  given  at  the  34th  and  35th  pages.  (Art.  39.) 

Transaction  1.  April  20, 1860.  Have  spent  5  days  with 
team  in  plowing  for  oats.  Labor  is  worth  $2.00  a  day. 

Tr.  2.  April  26.  Have  furnished  18  bushels  of  Oats  for 
Seed,  worth  31  cents  a  bushel ;  and  have  devoted  three-fourths 
of  the  day  to  sowing  the  same,  labor  being  worth  $1.00  a  day, 

Tr.  3.  April  27.  A  boy  and  team  have  been  occupied 
two  days  in  harrowing  in  oats,  at  $1.50  a  day. 

Tr.  4.  July  20.  Have  devoted  five  days  to  harvesting 
field  of  oats,  which  is  worth  $1.25  a  day. 

Tr.  5.  Sept.  22.  Have  this  day  finished  threshing  200 
bushels  of  oats,  the  entire  amount  raised  from  the  field. 
Threshing  costs  six  cents  a  bushel. 

Tr.  6.  Oct.  26.  Have  devoted  three  days  to  marketing 
200  bushels  of  oats,  which,  including  the  use  of  team,  is  wcrth 
three  cents  a  bushel.  The  crop  has  been  raised  on  land 
worth  $20.00  an  acre,  and  has  required  the  use  of  it  one 

QUEST.  90.  To  what  does  the  tenth  example  relate  ?    How  is  the  account  kept  ? 


GENERAL    BOOK-KEEPING. 


year.,  money  being  worth  7  per  cent,  per  annum.  Received 
for  the  oats  this  day  sold,  25  cents  a  bushel ;  retained  straw 
for  fodder,  worth  $5.00 ;  and  received  $3,00  for  straw  sold 
to  the  upholsterer.  "What  profit  on  this  Field  of  Oats  ? 

Ans.  $7.42. 

EXAMPLE   XI. 

91.  This  example  exhibits  an  account  with  a  Wheatfield 
of  Sixty  Acres.  The  value  of  land  and  the  rate  of  interest 
are  the  same  as  stated  in  the  last  example. 

Transaction  10  June  25,  1859.  Have  finished  plowing 
the  field  of  sixty  acres,  which  was  worth  $1.75  an  acre. 

Tr.  2.  July  20,  Have  finished  harrowing  the  field,  which 
was  worth  thirty-three,  and  one-third  cents  an  acre. 

Tr*  3.  Sept.  10.  Have  finished  the  cross-plowing,  which 
was  worth  one  dollar  and  twenty-five  cents  an  acre. 

Tr.  4.  Sept.  15.  Have  furnished  90  bushels  of  seed 
wheat,  which  was  worth  75  cents  a  bushel.  Sowed  the  field, 
which  was  worth  10  cents  an  acre ;  and  harrowed  after  the 
sowing,  which  was  worth  75  cents  an  acre. 

Tr.  5.  July  10,  1860.  Have  this  day  finished  cradling, 
binding,  and  shocking  the  sixty  acres  of  wheat,  which  was 
worth  one  dollar  an  acre. 

Tr.  6.  July  14.  Have  finished  drawing  into  the  barn, 
which  was  worth  thirty-three  and  one-third  cents  per  acre. 

Tr.  1.  Aug.  1.  Have  paid  10  cents  a  bushel  for  thresh- 
ing. The  field  yielded  fifteen  hundred  bushels  of  wheat. 

Tr.  8.  Aug.  15.  Marketed  1350  bushels,  the  time  and 
trouble  being  worth  2  cents  a  bushel.  The  value  of  the  land 
per  acre,  and  the  rate  of  interest  as  already  stated.  Kept 
for  use  on  the  farm,  one  hundred  bushels  of  seed  wheat, 
worth  75  cents  n  bushel ;  reserved  for  family  use  50  bushels, 
worth  75  cents  a  bushel;  and  sold,  at  tho  same  price,  1350 


QUEST.  91.   What  account  is  exhibited  in  tho  eleventh  example?    What  was  the 
Talu9  of  the  laud  occupied,  and  what  the  rate  of  interest  charged  for  ita  use.' 

70 


EXAMPLES    FOR   PRACTICE. 


bushels.  Sold  $20.00  worth  of  straw  to  the  paper-maker 
and  kept  $10.00  worth  for  fodder.  What  has  been  the  profit 
en  this  field  of  wheat  ?  Ans.  $495.50. 

EXAMPLE   XII. 

92.  This  example  exhibits  an  account  with  a  Potato 
Field  of  Twenty  Acres,  the  land  being  worth  thirty  dollars 
an  acre ;  interest  at  7  per  cent.  (See  Art.  39.) 

Transaction  1.  May  1, 1860.  The  plowing  of  the  twenty 
ceres 'for  potatoes  was  worth  one  dollar  and  fifty  cents  an 
acre. 

Tr.  2  May  10.  Have  furnished  225  bushels  of  potatoes 
for  seed,  which  were  worth  30  cents  a  bushel.  The  planting 
°.ost  one  dollar  and  fifty  cents  an  acre. 

Tr.  3.  June  25.  I  have  spent  ten  days  with  boy  and 
horse  in  plowing  out  potatoes,  which  was  worth  $1.25  a  day. 
I  have  also  paid  for  thirty  days'  work  in  hoeing,  at  seventy- 
five  cents  a  day. 

Tr,  4.  Nov.  1.  The  digging  required  70  days'  labor, 
worth  75  cents  a  day;  the  marketing  required  10  days  with 
team,  at  $2.00  a  day ;  and  the  value  of  the  land  and  the  rats 
of  interest  as  already  stated.  Sold  2450  bushels  of  potatoes 
for  2o  cents  a  bushel ;  used  200  bushels  in  fattening  hogs, 
worth  15  cents  a  bushel;  and  reserved  COO  bushels  for  home 
use,  worth  25  cents  a  bushel.  What  has  been  the  net  profit 
en  this  Potato  Field  for  one  year?  Ans.  $515.50. 

NOTE.  During  the  nine  years  the  former  editions  of  this  work  have  been  beforo 
uhe  public,  the  author  has  received  many  communications  from  practical  Farmers, 
and  from  the  officers  of  Agricultural  Societies,  assuring  him  of  the  numerous  and 
great  advantages  they  believe  to  IIMVIS  resulted  from  the  introduction  of  the  foregoing 
Examples  for  Practice;  and  as  he  has  also  been  mnny  times  assured  of  the  lively 
interest  with  which  pupils  generally  rngape  in  their  solution,  lie  has  retained  them 
almost  unchanged  in  the  present  revised  edition.  Similar  features  have  likewise  been 
incorporated  into  subsequent  forms  of  account. 


QUEST.  92.  What  does  the  twelfth  example  exhibit?    What  was  the  value  of  the 
land,  and  what  the  rate  of  interest?    What  net  profit  on  lias  crop '( 

n 


' 

1V/COCSITV 


GENERAL   BOOK-KEEPING. 


SECOND  FORM  OF  ACCOUNTS. 

93.  In  every  form  of  keeping  accounts  the  pr'nc^'ple  is 
the  same.     The  Second  Form  of  Accounts  differs  from  the 
First  in  but  few  particulars.     In  the  second  form  there  are 
two  sets  of  money  columns  on  each  page,  while  in  the  first 
form  there  is  but  one  set  on  a  page.     In  the  second  form, 
also,  the  debits  and  credits  are  both  kept  on  the  same  page, 
and  entered  in  the  orcfer  of  their  occurrence,  the  debits  in  the 
left-hand  set  of  money  columns,  and  the  credits  in  the  right- 
hand  set, 

94.  On  the  next  page  is  the  account  with  Henry  Van 
Allen,  given  from  the  42d  to  the  45th  pages,  (which  see,) 
here  arranged  according  to  the  provisions  of  the  Second  Form 
of  Accounts.     This  method  requires  less  space  for  an  account 
than  where  two  pages  are  employed,  and  especially  where 
there  is  a  considerable  inequality  in  the  number  of  entries  on 
the  two  sides  of  the  account ;  but  there  is  a  greater  liability 
to  make  mistakes  in  entering  the  amounts  in  the  correct  set 
of  money  columns. 

95.  The  First  Form  of  Accounts  is  adapted  to  the  wants 
of  farmers  generally,  and  of  persons  who  have  but  a  limited 
amount  of  business  to  transact.     The  Second  Form  is  often 
used  by  mechanics  and  physicians,  and  by  merchants  doing 
a  small  business.     But  the  Third  Form  is  better  adapted  to 
the  wants  of  persons  extensively  engaged  in  any  of  the  fore- 
going employments.     And  Double  Entry  will  often  be  found 
preferable  to  either,  and  especially  in  a  complicated  business. 


QUEST.  93.  Is  the  principle  the  same  in  every  form  of  accounts  ?  In  what  par- 
ticulars does  the  second  form  of  accounts  differ  from  the  first  t  —  94.  What  account 
already  given  is  here  arranged  according  to  the  provisions  of  the  Second  Form  of 
Accounts?  What  are  the  ad'antorres,  and  what  the  disadvantages,  of  this  method? 
•"05.  To  rrtioso  wacis  aro  the  uifferont  Forms  of  Account  adapted,  and  by  whom 
are  Uiey  used? 

72 


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57 


By  referring  to  the  remarks  made  upon  this  account 
at  the  44th  and  following  pages,  the  learner  will  be  prepared 
to  answer  the  subjoined  questions.  (Arts.  50  and  51.) 

QUEST.  95.  What  should  the  books  of  the  Creditor  specify  2  What  of  t.Ue  last  Dr. 
entry  in  the  account  with  II.  Van  Allen  2  May  the  Debtor  give  credit  in  his  books 
per  1  ill  received  2  In  such  cases  what  should  be  done  with  the  bill  2  Why  should 
tho  itoms  sold  be  specified  in  the  books  of  the  Creditor,  when  they  may  be  entered 
5>er  bill  in  the  books  of  the  Debtor  2  What  rule  is  given  for  making  Dr.  and  Or.  entries? 
7  73 


GENERAL    BOOK-KEEPING. 

ACCOUNTS  CURRENT. 

96.    When    accounts    are    kept    by   the    Second   Form, 

ACCOUNTS  CURRENT,  which  were  treated  of  at  the  48th  page, 

may  be  made  out  in  a  corresponding  manner.     The  account  of 

George  Graham  with  James  Armitage,  there  given,  is  again 

presented  below,  in  a  manner  corresponding  with  the  method 

of  keeping  accounts  by  the  Second  Form. 

<%eoT    q^aA**, 

<7                                *S    ' 

*•      ^' 

£zn.    SO    Q?o  3  (-&a$on4  Q^oJa<Me4   .50            4   L 

'0 

"         "     "     2  dTeto  ^ufi*  and  'dPattceM                  6 

-o 

e&e£      4     "     45   &d<).    ^a/ico       .     .45            2  £ 

5 

'/         //     '/     ^3^         '      orftcmnet  ,     .20                  5 

'0 

"         "     "    3  &a/wM  &&M        .     .40                 J 

V 

»        //    ^  40  X.   tftfuttet         .     .44 

4  40 

&Mau  40   etc  4  $4.    ^o//ee    .       .     .43                5 

2 

//         //     //     /J>  ^    £ffiiown  &u,aat    OQ             4   C 

' 

ti 

4   60 

//        //     //     Balance  due        .      . 

3  65 

f6   t 

>5       $6    65 

&becetwed  ^nauyjtenf, 

^amet  C 

l^tvmitaae. 

(f1*"       >          •    ) 

Svwtfcieu. 

QUEST.    96.   May  Accounts  Current  be  made  out  in  accordance 

with  the  second 

method  of  keeping  accounts  ?    What  account  that  has  been  heretofore  given  is  here 

presented  in  accordance  with  the  second  form  of  keeping  accounts? 

74 

ACCOUNTS    CURRENT. 


97.  This  example  is  the  same  as  that  given  at  the  48th 
page,  but  differently  arranged.     As  here  presented,  it  is  re- 
ceipted by  James  Armitage,  the  merchant,  per  Bulkley,  his 
clerk,  June  2d,  1860.    As  before  presented  it  was  not  receipted. 

98.  In  this  form  of  an  Account  Current,  the  transactions, 
like  the  entries  in  the  Second  Form  of  Accounts,  are  recorded 
in  the  order  of  their  occurrence,  the  amounts  in  all  cases  being 
carried  to  the  Dr.  or  Cr.  columns,  as  circumstances  require. 

99.  In  consequence  of  the  greater  liability  to  make  mis- 
takes in  carrying  the  amounts  to  the  correct  set  of  money 
columns,  as  already  intimated,  the  learner  should  be  doubly 
careful  that  his  entries  are  correctly  made,  until  the  habit  of 
accuracy  is  firmly  established ;  and  then  he  should  not  relax 
his  efforts.     With  the  practical  book-keeper,  accuracy  is  of 
the  first  importance ;  for  the  detection  of  a  few  mistakes  in 
an  account,  or  even  of  but  one  mistake,  tends  greatly  to 
diminish  the  confidence  that  might  otherwise  be  reposed  in 
him.  The  learner,  hence,  can  not  labor  too  assiduously  in  estab- 
lishing a  habit  that  will  be  of  so  great  importance  to  him  in  all 
future  life,  whether  engaged  in  business  for  himself  or  for  others. 

100.  On  the  next  page  are  two  examples,  which  will 
sufficiently  illustrate  this  mode  of  making  out  accounts.     They 
are  the  same  as  those  given  at  the  49th  page,  with  the  trans- 
actions arranged  to  compare  with  the  Second  Form  of  Ac- 
counts.   Here,  as  before,  the  price  and  the  quantity  are  given, 
and  the  pupil  is  left  to  carry  out  the  amount.     He  should 
be  careful  to  carry  each  amount  to  the  right  set  of  money 
columns.     If  the  amounts  are  correctly  entered,  the  accounts 
will  exactly  balance.     (See  instructions,  pp.  7  and  9.) 


QUEST.  97.  As  here  presented,  how  is  it  receipted  ?  —  98.  In  this  form  of  accounts, 
how  are  the  transactions  recorded  ?  To  what  columns  are  the  amounts  carried  ?  In 
which  set  of  money  columns  should  the  debits  he  entered,  the  right  or  the  left  ?  In 
which  set  should  the  credits  be  entered  ?  —  99.  Why  should  the  learner  be  doubly 
careful  in  making  these  entries  ?  How  long  should  he  thus  he  careful  ?  Should  he 
then  relax  his  efforts?  What  is  said  of  the  importance  of  accuracy ?  — 100.  When 
price  and  quantity  are  given,  what  should  the  pupil  do  ? 

75 


EXAMPLES   FOR  PRACTICE. 


^a 

Ofn  Q^cct 


> 


<fO 


40 

46 


&o 
</o 


.50 
.46 

.09 


and 


to 
(Example  1.) 


50 


aaac 


SO 


"  42  do. 
"  O'O  do. 
ofo  4  ^ 
//  sfi  // 

7 

to 


4.50 
4.00 


(Example  2.) 


QUEST.  100.  What  will  be  the  footings  in  the  first  example  when  the  amount* 
are  carried  out  and  added?    What  in  the  second  example? 

76 


EXAMPLES    FOR    PRACTICE. 


EXAMPLES   FOR  PRACTICE. 

SECOND    FORM    OF    ACCOUNTS. 

101.  As  the  remarks  made  under  this  head  at  the  60th 
page  are  applicable  to  the  examples  that  follow,  the  pupil 
will  do  well  to  review  them  before  proceeding  further.     The 
former  examples  were  solved  according  to  the  First  Form 
given  for  keeping  accounts ;  these  are  to  be  solved  according 
to  the  Second  Form  of  Accounts.     (See  Arts.  78  and  79.) 

EXAMPLE   I. 

102.  This  example  consists  of  a  series  of  transactions 
with  James  Davidson,  who  keeps  a  grocery  and  provision 
store.     (For  instructions  see  Note  at  Art.  81.) 

Transaction  1.  Jan.  2,  1860.  Bought  of  him  18  Ibs. 
Brown  Sugar  at  8  cents  a  pound ;  15  Ibs.  of  Rice  at  7  cents 
a  pound;  and  12  Ibs.  of  Loaf  Sugar  at  14  cents  a  pound. 

Tr.  2.  Feb.  10.  Paid  him  four  dollars  in  Cash.  Also, 
bought  of  him  10  Ibs.  of  Codfish  at  six  cents  a  pound,  and  2 
gallons  of  Molasses  at  forty-four  cents  a  gallon. 

Tr.  3.  March  4.  Bought  of  him  12  Ibs.  of  Butter  at  15 
cents  a  pound,  and  10  Ibs.  of  Cheese  at  8  cents  a  pound. 

Tr.  4.  March  24.  Bought  of  him  8  Ibs.  of  Corn  Starch 
at  11  cents  a  pound;  2  Ibs.  of  Saleratus  at  9  cents  a  pound; 
and  4  Ibs.  of  Ginger  at  10  cents  a  pound. 

Tr.  5.  April  12.  Bought  of  him  4  bushels  of  Potatoes 
at  42  cents  a  bushel,  and  6  doz.  Eggs  at  10  cents  a  dozen. 
Paid  him  on  account  four  dollars  in  Cash. 

Tr.  6.  May  1.  Have  this  day  purchased  of  him  one 
Ham,  weighing  18  Ibs.,  at  9  cents  a  pound,  and  14  Ibs.  of 
Corn  Meal  at  one  cent  a  pound. 

QUEST.  101.  Why  are  examples  for  practice  introduced  into  this  work  ?    Of  what 
does  each  example  consist,  and  how  should  it  be  treated?     How  may  you  know 
whether  the  computations  are  correctly  made,  and  the  transactions  rightly  enteredl 
—  102.  Of  what  does  the  first  example  in  the  second  form  of  accounts  consist  2 
7*  77 


GENERAL    BOOK-KEEPING. 


Tr.  7.  June  10.  Bought  this  day  of  James  Davidson 
12  Ibs.  of  Rice  at  6  cents  a  pound. 

Tr.  8.  July  2.  Bought  one-half  bushel  of  Potatoes  at 
50  cents  a  bushel,  and  10  Ibs.  of  Mackerel  at  9  cents  a  pound, 

Tr.  9.  Aug.  1.  Settled  and  paid  the  balance  due  him 
in  Cash.  How  much  was  it  ?  Ans.  $7.62. 


EXAMPLE    II. 


103.  This  example  consists  of  five  transactions  with  Henry 
Ingalls,  who  keeps  a  boot  and  shoe  and  furnishing  store. 

Transaction  1.  Jan.  4,  1860.  I  have  sold  him  8  cords 
of  Hickory  at  $1.50  a  cord.  Have  bought  of  him  1  pair  of 
Kip  Boots  for  $4.00 ;  3  pairs  of  Children's  Gaiters  at  60  cts. 
a  pair;  and  2  pairs  of  Boys'  Suspenders  at  14  cts.  a  pair. 

Tr.  2.  April  10.  Purchased  of  him  this  day  three  pairs 
of  Children's  Gloves  at  fifteen  cents  a  pair. 

Tr.  3.  April  14.  Bought  of  him  4  Linen  Hdkfs.  at  6G 
cents  each,  and  2  pairs  of  Misses'  Gaiters  at  $1.25  a  pair. 

Tr.  4.  May  6.  Bought  one  Leghorn  Hat  for  one  dollar 
and  fifty  cents,  and  2  Palm  Leaf  Hats  for  30  cents  each. 

Tr.  5.  May  20.  Sold  him  80  Ibs.  of  Wool  for  40  cents 
a  pound,  and  settled  the  account,  he  paying  the  balance  due 
in  Cash.  What  was  the  amount  paid  by  him  to  balance  the 
account  ?  Ans.  $30.47. 

EXAMPLE    III. 

104.  This  example  consists  of  a  series  of  transactions 
with  John  Adams,  a  hardware  merchant. 

Transaction  1.  Jan.  10,  1860.  Bought  of  him  2  Axes 
at  $1.25- each,  and  3  Ax  Helves  at  20  cents  each. 

Tr.  2.  April  4.  Bought  of  him  three  shanked  Hoes  at 
65  cents  each,  and  one  Hoe  with  welded  eye  for  44  cents. 

Tr.  3.  June  10.  Bought  3  Scythes  at  eighty-eight  cents 
each,  and  2  Scythe  Snaths  at  seventy-five  cents  each. 

QUEST.  103.  Of  what  does  the  second  example  consist  ?  — 104.  Of  what  the  third 

78 


EXAMPLES    FOR    PRACTICE. 


Tr.  4.  June  20.  Bought  a  Log  Chain  weighing  20  Ibs^ 
at  10  cents  a  pound,  and  one  Bush  Scythe  for  one  dollar. 

Tr.  5.  July  2.  Bought  of  him  one  Grain  Cradle  foj 
three  dollars,  and  two  Hay  Rakes  for  fifteen  cents  each. 

Tr.  6.  Sept.  10.  Settled  and  paid  the  amount  due  him 
in  Cash.  How  much  was  it  ?  Ans.  $15.93. 

EXAMPLE    IV. 

105.  This  example  consists  of  a  Tobacco  Account  for  the 
period  of  twelve  years.  The  person  whose  account  is  here 
presented  uses  three  Cigars  a  day,  that  cost  him  three  cents 
apiece,  and  pays  for  Tobacco  in  other  forms,  for  Smoking 
and  Chewing,  $4.59  a  year.  This  is  a  low  estimate  of  the 
expenses  of  an  habitual  smoker  and  chewer  of  Tobacco. 
Thousands  of  persons  that  support  these  habits  pay  on  their 
account  twice  or  thrice  the  amount  here  stated.  Compute 
the  pecuniary  expense  incurred  at  this  estimate,  on  account 
of  these  habits,  in  twelve  years,  allowing  interest  on  the 
amount  invested  at  7  per  cent  with  annual  settlements. 

The  transactions,  which  we  will  suppose  commenced  with 
the  beginning  of  the  year  1841,  may  be  arranged  as  follows : 

Transaction  1.  1841.  At  the  end  of  the  year  there 
should  be  entered  on  the  Dr.  side  of  the  account  the  amount 
expended  for  Cigars  and  Tobacco  for  one  year. 

Tr.  2.  1842.  At  the  end  of  this  year  there  should  be 
entered  on  the  same  side  of  the  account,  first  the  inter- 
est *  on  the  amount  expended  for  the  preceding  year,  and  then 
the  amount  expended  for  the  last  year. 

Tr.  3.  1843.  At  the  end  of  this  year  there  should  be 
entered,  first  the  interest  on  the  amount  expended  for  the. 

*  In  computing  interest,  if  the  mills  and  decimals  amount  to  more  than  half  a  cent, 
count  them  as  a  cent ;  if  they  amount  to  less  than  lialf  a  cent,  omit  them  entirely. 

QUEST.  105.  Of  what  does  the  fourth  example  consist?  What  number  of  Cigars 
are  used  a  day,  and  at  what  cost,  and  what  amount  of  Tobacco  does  the  person  whose 
account  ic  here  presented  use?  Is  this  a  high  estimate? 

79 


GENERAL    BOOK-KEEPING. 


two  preceding  years,  (the  interest  on  the  sum  expended 
the  first  year  being  considered  a  part  of  said  amount,)  and 
then  the  amount  expended  for  the  last  year. 

Tr.  4.  1844.  There  should  be  entered,  first  the  interest 
on  the  amount  expended  for  the  three  preceding  years,  (the 
interests  that  have  accrued  being  considered  a  part  of  said 
amount,)  and  then  the  amount  expended  for  the  last  year. 

Tr.  5.  1845.  There  should  be  entered,  first  the  interest 
on  the  amount  expended  for  all  the  preceding  years,  (the 
interests  that  have  accrued  being  considered  a  part  of  said 
amount,)  and  then  the  amount  expended  for  the  last  year. . 

[The  preceding  transactions  sufficiently  elucidate  the  prin- 
ciple upon  which  the  remaining  seven  transactions  should  be 
entered,  the  last  of  which  will  be  as  follows :] 

Tr.  12.  1852.  There  should  be  entered,  first  the  interest 
on  the  amount  expended  for  the  eleven  preceding  years,  (the 
interests  that  have  accrued  being  considered  a  part  of  said 
amount,)  and  then  the  amount  expended  for  the  last  year. 
Finally,  the  account  should  be  closed  by  entering  on  the  Cr. 
side  the  necessary  amount  to  balance.  (Art.  33.)  What 
will  be  the  expense  of  these  two  habits  in  twelve  years,  as 
deduced  from  these  transactions  ?  Am.  $669.75. 

EXAMPLE   V. 

106.  The  Tobacco  Account  introduced  in  the  last  exam- 
ple is  here  continued.  That  account  was  for  the  period  of 
twelve  years.  This  example  brings  the  account  down  eleven 
years  further,  making  twenty-three  years  in  all.  Like  the 
former,  it  will  require  twelve  transactions,  of  which  the  first 
two  and  the  last  are  here  given. 

Transaction  1.  1852.  There  should  be  entered  on  the 
Dr.  side  of  the  account  the  amount  expended  for  Tobacco 
the  first  twelve  years,  as  shown  by  the  preceding  example. 

QiiEST.  105.  What  is  the  expense  incurred  by  an  individual  fur  Tobacco  ou  accouul 
jjf  Smoking  and  Chewing  according  to  this  estimate  in  twelve  years  ? 

80 


EXAMPLES    FOB*  PRACTICE. 


[The  first  entry  is  neither  more  nor  less  than  the  "amount 
to  balance"  the  preceding  account  brought  forward.] 

Tr.  2.  1853.  There  should  be  entered,  first  the  interest 
on  the  amount  expended  for  Tobacco  the  twelve  preceding 
years,  and  then  the  amount  expended  for  the  last  year. 

Tr.  12.  1863.  This  transaction  should  be  entered  on  the 
principle  stated  in  the  twelfth  transaction  of  the  last  example. 

[The  principle  upon  which  the  intervening  transactions 
should  be  entered  has  been  sufficiently  elucidated.] 

What  will  be  the  expense  of  Smoking  and  Chewing,  at 
the  rates  stated  in  Example  IV.,  for  the  period  of  twenty- 
three  years  ?  Ans.  $2000.65. 

EXAMPLE   VI. 

107.  The  Tobacco  Account  embraced  in  the  two  pre- 
ceding examples  is  here  continued.     In  those  two  examples 
taken  together,  the  account  is  exhibited   for  twenty-three 
years ;  in  this  it  is  brought  down  eleven  years  further,  making 
thirty-four  years  in  all.     It  will  require  the  same  number  of 
transactions  as  the  last  example.     These  will  commence  with 
the  year  1863,  and  end  with  the  year  1874. 

What  will  be  the  expense  of  Smoking  and  Chewing,  at 
the  rates  stated  in  Example  IV.,  for  the  period  of  thirty-four 
years?  Ans.  $4802.01. 

EXAMPLE   VII. 

108.  This  example  consists  of  the  Cash  Account  of  an 
individual  who  is  employed  at  a  salary  of  $500.00  a  year. 
In  the  llth  and  19th  transactions  the  articles  purchased  are 
not  specified ;  but  there  is  reference  to  a  Memorandum  Book 
in  which  they  are  supposed  to  be  entered. 

Transaction  1.     Jan.  1,  1860;     The  individual  debits  Cash 

QUEST.  106.  What  will  the  expense  amount  to  in  twenty-three  years,  according 
to  this  estimate?  — 107.  What  in  thirty-four  years?  — 108.  Of  what  does  th? 
leventh  example  consist? 

81 


GENERAL    BOOK-KEEPING. 


with  the  amount  of  Cash  on  hand  at  the  beginning  of  the 
year,  which  is  twenty-five  dollars  and  fifty  cents. 

Tr.  2.     Jan.  29.     Paid  4  weeks'  board  at  2  dollars  a  week. 

Tr.  3.     Feb.  27.    Paid  4  weeks'  board  at  2  dollars  a  week. 

Tr.  4.     Mar.  25.    Paid  4  weeks'  board  at  2  dollars  a  week. 

Tr.  5.     April  1.     Received  one  quarter's  salary. 

Tr.  6.     April  10.  Paid  30  dollars  for  a  suit  of  clothes. 

Tr.  7.  April  24.  Paid  four  weeks'  board  at  2  dollars  a 
week.  Also  paid  the  same  day  4  dollars  for  one  silk  hat. 

Tr.  8.     May  3.     Paid  a  missionary  subscription  of  $15.00. 

Tr.  9.  May  10.  Have  this  day  subscribed  and  paid  ten 
dollars  for  the  support  of  the  ministry  the  current  year. 

Tr.  10.     May  23.     Paid  4  weeks'  board  at  $2.00  a  week. 

Tr.  11.  June  1.  Paid  for  sundries  for  personal  use,  as 
per  memorandum,  four  dollars  and  fifty-six  cents. 

Tr.  12.  July  4.  Paid  anniversary  expenses,  amounting 
in  all  to  four  dollars  and  fifty-seven  cents. 

Tr.  13.     July  22.     Paid  8  weeks'  board  at  $2.00  a  week. 

Tr.  14.     Aug.  15.    Received  1  and  a  half  quarter's  salary. 

Tr.  15.  Aug.  25.  Bought  a  dress  and  sundry  small 
articles  for  sister,  amounting  in  all  to  $12.50. 

Tr.  16.     Oct.  1.     Received  one  half  quarter's  salary. 

Tr.  17.     Oct.  10.     Paid  $14.00  for  a  cow  for  my  mother. 

Tr.  18.     Oct.  22.     Paid  13  weeks'  board  at  $2.00  a  week. 

Tr.  19.  Nov.  10.  Bought  sundries  as  per  memorandum, 
amounting  to  seven  dollars  and  seventy-five  cents. 

Tr.  20.  Dec.  31.  Paid  11  weeks'  board  at  $2.00  a  week. 
Received  one  quarter's  salary.  What  amount  of  Cash  on 
hand  ?  Am.  $319.12. 

EXAMPLE   VIII. 

109.  This  example  exhibits  a  Wine  Account  for  the 
period  of  twelve  years.  It  embraces  the  amount  paid  for 
Wine,  Cigars,  etc.,  and  occasionally  a  moderate  expenditure 

QUEST.  109.   What  does  the  eighth  example  exhibit?    What  docs  it  embrace/ 

82 


EXAMPLES    FOR    PRACTICE. 


for  a  social  repast,  including  supper,  cards,  and  sundry  kin- 
dred disbursements.  The  expense  is  estimated  at  $1.00  a 
day,  whidh  a  reformed  man  (who  has  had  twenty  years'  expe- 
rience, during  which  time  he  squandered  an  immense  patri- 
mony) informs  me  is  a  very  low  estimate  of  the  expenses 
attendant  upon  fashionable  tippling.  Interest  is  to  be  com- 
puted as  in  the  Tobacco  Account  exhibited  in  Example  IV., 
and  the  transactions  are  to  be  entered  according  to  the  prin- 
ciples there  stated. 

110.  The  Wine  Account,  we  will  suppose,  commenced 
with-the  year  1848.     What  will  it  amount  to  in  twelve  years 
ending  with  the  year  1859  ?  Ans.  $6529.29. 

EXAMPLE    IX. 

111.  The  Wine  Account  introduced  in  the  last  example 
is  here  continued.     That  account  was  for  the  period  of  twelve 
years.     This  example  brings  the  account  down  eleven  years 
further,  making  twenty-three  years  in  all.     This,  like  Exam- 
ple V.,  will  embrace  twelve  transactions.     These  commence 
with  the  year  1859,  and  include  the  year  1870. 

What  will  the  Wine  A-ccount  amount  to  in  twenty-three 
years?  Ans.  $19,504.22. 

EXAMPLE   X. 

112.  The  Wine  Account  embraced  in  the  two  preceding 
examples  is  here  continued.     In  those  two  examples  taken 
together,  the  account  is  exhibited  for  twenty-three  years ;  in 
this  it  is  carried  forward  eleven  years  further,  making  thirty- 
four  years  in  all.     It  will  require  the  same  number  of  trans- 
actions as  the  last  example.     These  will  commence  with  the 
year  1870  and  end  with  the  year  1881.     What  will  the  Wine 
Account  amount  to  in  thirty-four  years  ?   Ans.  $46,814.55. 

QUEST.  109.  What  is  the  expense  estimated  at  per  day  ?  Is  this  a  high  estimate? 
••-110.  What  \\-\\\  the  account  amount  to  in  twelve  years? — 111.  What  hi  twenty* 
three  years?  — 112,  Wl\at  will  the  Wine  Account  amount  to  at  this  race  iu  tnkty 
fcor  yeare? 


GENERAL    BOOK-KEEPING. 


EXAMPLE    XI. 

113.  This  example  and  the  next  consist  of  a  series  of 
transactions  with  Otho  H.  Hudson,  a  hardware  merchant. 

Transaction  1.  Jan.  3,  1860.  Bought  of  him  2  Nail 
Hammers  at  50  cents  each;  one  Cast  Steel  Nail  Hammer 
at  one  dollar ;  2  Hand  Saws  at  $2.00  each ;  one  large 
Backed  Saw  for  $2.00 ;  and  one  small  Backed  Saw  for  $1.25. 

Tr.  2.  Feb.  1.  Bought  of  him  2  Jack  Planes  and  2  Fore 
Planes  at  $1.25  each,  and  2  Long  Jointers  at  $1.50  each. 

Tr.  3.  Feb.  10.  Bought  1  pair  of  Match  Planes,  1£ 
in.,  for  $2.00 ;  2  pairs  of  Match  Planes,  1  £  in.,  at  $2.25  a  pair  \ 
and  2  Smoothing  Planes  at  $1.00  each.  Paid  $8.00  on  acct 

Tr.  4.  March  20.  Bought  of  him  one  seven-foot  Cross- 
cut Saw  at  63  cents  a  foot,  and  one  seven-foot  Mill  Saw  at 
94  cents  a  foot.  Settled  and  paid  him  the  balance  due  in 
Cash.  How  much  was  it  ?  Am.  $28.74. 

EXAMPLE   XII. 

114.  This  example  is  a  continuation  of  the  account  with 
Otho  H.  Hudson,  introduced  in  the  last  example. 

Transaction  1  April  1,  1860.  Bought  of  him  2  Bed- 
cords  at  25  cents  each ;  one  Dinner-bell  at  one  dollar ;  one 
Clothes-brush  at  50  cents;  one  Nail-brush  at  31  cents;  and 
2  Tooth-brushes  at  20  cents  each. 

Tr.  2.  May  10.  Bought  of  him  one  Strainer  Milk-pail 
for  60  cents ;  3  Milk-pans  at  20  cents  each ;  and  one  Wir« 
Sieve  for  44  cents.  Settled  and  paid  the  amount  due  on  the 
account.  How  much  was  it  ?  Ans.  $4.35. 

EXAMPLE    XIII. 

115.  This  example  consists  of  a  Sheep  and  Wool  Account 
I  give  it  as  furnished  by  a  citizen  who  kept  the  Sheep.     The 
transactions  may  be  arranged  under  two  dates. 

QUEST.  113.  What  do  the  eleventh  and  twelfth  examples  consist  ol?  -115.   Of 
what  does  the  thirteenth  example  consist  ? 

84 


EXAMPLES    FOR   PRACTICE. 


Transaction  1.  June,  1859.  I  have  thirty  Sheep,  chiefly 
Lambs,  valued  at  one  dollar  and  twenty-five  cents  each. 

Tr.  2.  June,  1860.  The  Sheep  have  been  kept  a  portion 
of  the  year  on  a  summer-fallow,  where  they  were  rather 
useful  to  the  fallow  than  expensive,  and  the  remainder  of  the 
year  on  the  common.  The  pasturing  and  care  may  be  con- 
sidered worth  $4.80  for  the  year.  They  were  not  foddered 
at  all ;  but  during  the  winter  they  were  fed  half  a  bushel  of 
oats  a  day  for  60  days,  oats  being  worth  25  cents  a  bushel. 
The  expense  of  washing  and  shearing  was  4  cents  a  head. 
.  The  marketing  of  the  Wool  was  worth  50  cents.  Had  the 
sheep  been  sold  a  year  ago,  the  money  would  have  drawn  10 
per  cent,  interest.  Kept  7  Ibs.  of  "Wool,  worth  40  cents  a 
pound,  for  family  use.  Sold  103  Ibs.  for  40  cents  a  pound. 
The  30  old  Sheep  are  worth  $1.50  each.  I  have  raised  27 
Lambs  from  them,  worth  $1.25  each.  What  has  been  the 
profit  on  30  Sheep  for  one  year  ?  Ans.  $67.50. 

EXAMPLE   XIV. 

116.    This  example  is  an  acct.  with  O.  D.  Morgan,  a  grocer. 

Transaction  1.  Jan.  25,  1860.  Bought  of  him  10£  Ibs. 
of  Brown  Sugar  at  10  cents  a  pound;  12  Ibs.  of  Butter  at 
14  cents;  and  4  bushels  of  Potatoes  at  40  cents  a  bushel. 

Tr.  2.  Feb.  20.  Bought  of  him  8  Ibs.  of  Rice  at  6  cents 
a  pound,  and  12  Ibs.  of  Corn  Starch  at  12£  cents  a  pound. 

Tr.  3.  May  2.  Bought  of  him  8  Ibs.  of  Codfish  at  6 
cents  a  pound.  Settled  and  paid  the  amount  due  in  Cash. 
How  much  money  did  he  receive  ?  Ans.  $6.79. 

NOTE.  The  13th  example,  on  page  84,  is  similar  to  the  examples  referred  to  in  the 
note  at  the  71st  page.  Such  examples  may  with  equal  propriety  be  kept  by  the  First 
Form  of  Accounts,  or  by  the  Second  Form. 

QCEST.  115.  Is  it  real  or  fictitious  ?  What  was  the  profit  on  thirty  Sfeeen  for  one 
fear  ?  How  much  is  this  a  head  ? 

8  85 


GENERAL    BOOK-KEEPING. 


THIRD  FORM  OF  ACCOUNTS. 

117.  In  the  Third  Form  of  Accounts  two  principal  books 
are  used  —  the  Day  Book  and  the  Ledger.     This  form  of 
accounts  is  sometimes  called  the  Merchants'  Form. 

118.  The  DAY  BOOK  is  a  book  in  which  all  the  debit 
and  credit  transactions  of  the  day  are  entered  at  the  time  and 
in  the  order  of  their  occurrence,  whether  with  one  or  many 
persons.     It  is  ruled  like  the  Ledger  in  the  Second  Form  of 
Accounts,  with  but  one  exception :  in  the  Ledger  there  are 

|  seven  spaces,  the  two  at  the  left  being  occupied  for  the  month 
and  the  day  of  the  month ;  while  in  the  Day  Book  there  are 
but  six  spaces,  one  at  the  left  being  omitted. 

119.  The  date  in  the  Day  Book  is  kept  in  the  middle  of 
the  page,  and  the  left-hand  space  is  used  for  entering  the 
number  of  the  Ledger  folio  into  which  the  entry  is  posted. 

120.  In  the  Third  Form  of  Accounts,  when  several  arti- 
cles are  sold  to  the  same  person  at  one  time,  (or  bought  of 
him,  as  the  case  may  be,)  it  is  best  only  to  short  extend  the 
particular  sums,  or  to  enter  them  in  the  first  set  of  money 
columns,  and  then  full  extend  the  amount  of  the  whole,  entering 
the  same  in  the  second  set  of  money  columns.     By  this  means 
the  number  of  entries  necessary  to  be  made  in  the  Ledger 
will  be  considerably  diminished,  and  the  account  will  hence  be 
exhibited  in  much  less  space  than  would  be  otherwise  required. 

121.  Before  any  amount  is  full  extended,  in  order  to  avoid 
mistakes,  it  will  be  well  for  the  book-keeper  always  carefully 
to  review  the  entries,  with  a  pen  or  pencil  in  hand,  affixing  to 
those  that  have  been  so  examined  a  sign  (thus  V)  to  show 

QUEST.  117.  How  many  principal  books  arc  used  in  the  third  form  of  accounts? 
What  are  they  ?  What  is  this  form  sometimes  called  ?  — 118.  What  is  the  Day  Book  ? 
How  is  it  ruled?  — 119.  Where  is  the  date  kept?  For  what,  is  the  left-hand  space 
used?  — 120.  When  should  the  items  of  an  account  be  short  extended?  What 
advantage  i.s  derived  from  full  extending  the  amount  only  of  the  articles  bought  or 
sold  at  one  time  ?  — 121.  What  is  said  in  relation  to  reviewing  the  entries  before  the 
amount  is  full  extended  ? 


THIRt)    FORM    OF    ACCOUNTS. 


that  the  work  has  been  reviewed.  When  thus  tested,  the 
amount  of  the  purchase  or  sale  may  be  full  extended.  In 
this  form  of  accounts  it  is  customary  to  use  the  counting-room 
at  (  (a)  )  in  connection  with  the  price  per  yard,  pound,  etc. 

122.  The  LEDGER  is  a  book  to  which  the  entries  recorded 
in  the  Day  Book  are  transferred,  and  so  arranged  as  to  pre- 
sent the  account  with  each  person  on  a  folio  by  itself. 

123.  The    Ledger   is   ruled  as   follows :    Each  page  is 
divided  by  double  perpendicular  lines  into  two  equal  parts, 
each  of  which  is  ruled  like  the  Ledger  in  the  First  Form  of 
Accounts,  with  this  exception :   there  is  an  additional  space 
at  the  left  of  the  money  columns  in  which  is  entered  the  page 
of  the  Day  Book  from  which  the  entry  is  posted. 

124.  The  amount  only  of  the  articles  purchased  at  any 
one  time  is  carried  to  the  Ledger.     The  debit  entry,  "  To 
Day  Book,  21,  $5.38,"  which  is  the  first  in  the  following 
Ledger  in  the  account  with  II.  M.  Roberts,  is  elliptical,  (see 
p.  100.)      Supply  the    ellipses    and  the  entry  stands   thus: 
"  To  the  amount  of  the  articles  debited  in  the  Day  Book  on 
the  21st  page,  $5.38."     The  same  is  true  of  all  Ledger  entries. 

125.  Instructions  are  sometimes  given  to  note  in  connec- 
tion with  debit  and  credit  entries  in  the  Ledger,  the  words 
"  Sundries,"  «  Groceries,"  "  Goods,"  "  Merchandise,"  "  Cash," 
"  Note,"  "  Order,"  etc.,  as  the  case  may  be.     This  may  prop- 
erly be  done  whenever  such  an  entry  will  save  the  necessity 
for  referring  to  the  Day  Book  for  an  explanation ;  for  we 
should  keep  as  few  books  as  will  answer  our  purpose,  and 
with  the  least  writing  practicable  make  them  tell  the  most 
possible.     But  as  such  entries  give  the  Ledger  a  bad  appear- 
ance, they  should  be  employed  only  when  useful. 


QUEST.  121.  What  is  said  of  the  counting-room  at  (@)  used  in  the  third  form  of 
accounts  ?  —  ]22.  What  is  the  Ledger?  —  123.  How  is  it  ruled  ?  What  is  the  use 
of  the  additional  space?  — 124.  In  posting,  what  only  is  carried  to  the  Ledger? 
What  is  said  of  elliptical  entries?  How  will  it  stand  with  the  ellipses  supplied?  la 
the  same  true  of  all  Ledger  entries  ?  — 125.  What  instructions  are  sometimes  given 
in  relation  to  posting?  When  may  this  be  done,  and  why? 

87 


GENERAL    BOOK-KEEPING. 


126.  Moreover,  to  avoid  the  common  inconvenience  in 
text-books  of  turning  the  book  around  in  order  to  exhibit  the 
Ledger  accounts,  which  is  both  unnatural  and  awkward,  and 
the  scarcely  less  objectionable  method  of  exhibiting  the  Dr. 
and  Cr.  entries  on  different  pages,  which  is  rarely  if  ever 
practiced  in  this  form  of  accounts,  it  has  been  found  necessary 
to  diminish  the  third  space  in  the  Ledger,  and  to  use  the 
letters  £^T  g$.  instead  of  the  whole  word  Day  Book.     We 
likewise  employ  gffi.  for  Balance,  of.  for  Invoice,  of,  g$.  for 
Invoice  Book,   e£?  gfl.   for  Sales  Book,  and  &  $  &  for 
Profit  &  Loss,  and  for  a  like  reason.    But  in  doing  this,  while 
we  really  sacrifice  nothing,  we  gain  much ;  for  we  exhibit  the 
.exact  form  in  which  accounts  are  usually  kept.  Indeed,  many 
of  our  best  accountants  omit  this  space  entirely.   It  will  be  seen, 
then,  that  the  middle  course  has  been  adopted  in  this  treatise. 

127.  POSTING  BOOKS  is  transferring  the  accounts  of 
various  persons  from  the  Day  Book,  through  which  they  are 
scattered,  to  the  Ledger,  and  arranging  each  on  a  folio  by 
itself,  with  the  proper  reference  figures  in  the  Day  Book  to 
show  the  folio  of  the  Ledger  into  which  each  entry  is  posted, 
and  with  corresponding  reference  figures  in  the  Ledger  to  show 
the  page  of  the  Day  Book  from  which  each  entry  is  posted. 

128.  Posting  is  done  as  follows:    Take  the  Day  Book 
and  turn  to  the  first  unposted  entry,  and  by  means  of  the 
Index  find  the  account  in  the  Ledger  to  which  the  entry 
belongs,  if  such  an  account  has  been  opened.     If  no  such 
account  has  been  opened  in  the  Ledger,  write  the  proper 
title   in   the   Index,  opposite  which  place  the  folio  of  the 
Ledger  that  is  to  be  devoted  to  the  account,  and  then,  having 
entered  the  title  in  the  Ledger,  proceed  with  the  posting. 
Entries  may  be  posted  directly  from  the  Cash  Book. 

QUEST.  126.  What  do  the  letters  D.  B.  in  the  third  space  in  the  Ledger  stand 
for?  What  do  other  letters  named  stand  for?  Why  has  this  abridgment  been 
made?  What  is  sacrificed,  and  what  gained  by  it?  — 127.  What  is  meaut  by  the 
term  Posting  Books  ?  — 128.  How  is  Posting  doue  ? 


THIRD    FORM    OF   ACCOUNTS. 


129.  If  at  any  time  it  is  ascertained  that  a  transaction 
has  not  been  recorded  in  its  proper  place,  and  under  its 
appropriate    date,  the   entry  should   be   immediately  made, 
with  the  proper  explanation.     In  the  First  and  Second  Forms 
of  Account,  the  first  entry  of  an  account  will  of  course  be 
made  in  the  Ledger,  as  that  is  the  only  book  used ;  but  in 
the  Third  Form  of  Accounts  the  original  entry  should  in  all 
cases  be  made  in  the  Day  Book,  from  which  it  must  be 
posted  into  the  Ledger. 

130.  Should  an  entry  at  any  time,  by  accident  or  care- 
lessness, be  made  on  the  wrong  side  of  an  account,  it  should 
not  be  erased ;  but  the  same  amount  should  be  entered  on 
the  opposite  side  of  the  account,  "  To  Error,"  or  "  By  Error," 
as  the  case  may  be.     It  is  apparent  that  the  only  effect  of 
this  last  entry  will  be  to  counteract  the  mistake;  this  done, 
the  correct  entry  should  be  made.     In  case  a  transaction  is 
entered  to  the  wrong  account,  the  correction  is  made  in  a 
similar  manner ;  but  too  great  pains  can  not  be  taken  to  make 
the  original  entries  correct.     It  should  be  the  aim  and  pride 
of  the  book-keeper  never  to  make  a  mistake  in  the  entry  of 
his  accounts. 

131.  It  has  been  already  remarked,  (Art.  29,)  that  when 
a  person  has  several  Ledgers,  they  should  be  designated  by 
the  letters  of  the  alphabet,  thus:    Ledger  A;  Ledger  B;  etc. 
Day  Books  should  be  lettered  in  the  same  manner ;  and  the 
first  entry  that  is  posted  from  a  new  Day  Book  into  the  Led- 
ger should  show  in  the  Ledger  the  Day  Book  from  which  it 

QUEST.  129.  If  at  any  time  it  is  ascertained  that  a  transaction  has  not  been 
recorded  in  its  proper  place,  and  under  its  appropriate  date,  what  should  be  done? 
Where  is  the  first  entry  of  an  account  made  in  the  First  and  Second  Forms  of  Account? 
Where  in  the  Third  Form  of  Accounts?  —  13O.  In  case  a  transaction  is  entered  on 
the  wrong  side  of  an  account,  should  the  entry  be  erased?  What  should  be  done? 
What  will  be  the  effect  of  this  entry  ?  Should  the  correct  entry  then  be  made  ?  In 
case  a  transaction  is  entered  to  the  wrong  account,  how  is  the  correction  made?  Can 
too  great  pains  be  taken  to  make  the  original  entries  correct'?  What  should  be  the 
aim  and  pride  of  the  book-keeper  ?  —  131.  When  several  Day  Books  and  Ledgers  are 
used  by  tho  same  person,  how  are  they  designated  ?  When  you  commence  to  post 
from  a  new  Day  Book,  what  should  the  first  entry  show  ? 
8*  89  » 


GENERAL    BOOK-KEEPING. 


is  posted.  For  example,  if  you  commence  Day  Book  A,  and 
Ledger  A,  at  the  same  time,  the  Day  Book  may  be  filled 
when  the  Ledger  is  not  more  than  one-fourth  full.  In  this 
case  the  first  entry  to  each  account  that  is  posted  from  Day 
Book  B  into  Ledger  A  should  be  entered  thus :  To  or  By 
(as  the  case  may  be)  Day  Book  B,  p.  1. 

132.  When  one  Ledger  is  filled  and  a  new  one  is  opened, 
any  unsettled  accounts  may  be  carried  to  the  new  Ledger  in 
the  same  manner  that  an  account  is  carried  from  one  folio  to 
another,  for  which  see  Arts.  48  and  49. 


ILLUSTRATIVE  EXAMPLE. 

THIRD    FORM    OP   ACCOUNTS. 

133.  For  the  purpose  of  illustrating  the  mode  of  making 
Day  Book  entries  and  posting  the  same  into  the  Ledger,  we 
introduce  a  sample  of  Transactions  as  taken  from  a  Retail 
Store,  with  the  Day  Book  entries  and  Ledger  postings  which 
these  Transactions  require.  The  learner  has  only  to  suppose 
himself  the  merchant  conducting  this  business,  and  to  regard 
these  Transactions  as  having  actually  occurred,  and  they  will 
possess  for  him  nearly  all  the  advantages  of  real  business. 
He  will  thus  have  the  benefit  of  combining  the  Theory  of 
business  with  Practice  in  the  counting-room,  as  fully  as  is 
possible  short  of  engaging  in  actual  business. 

Tuesday,  May  1st,  1860. 

Transaction  1.  I  have  sold  to  H.  M.  Roberts  28  yds.  of 
Sheeting  at  eight  and  a  half  cents  a  yard,  and  two  pairs 
of  Shoes  at  one  dollar  and  fifty  cents  a  pair ;  and  I  have 
received  from  him  22  bushels  of  Oats  at  45  cents  a  bushel. 

QUEST.  131.  Give  an  example. — 132.  When  one  Ledger  is  filled  and  a  new 
one  opened,  what  should  be  done  with  unsettled  accounts? — 133.  For  what  pur- 
pose are  sample  transactions  introduced  ?  What  should  the  learner  do,  and  with  what 
advantage  to  himself? 


ILLUSTRATIVE    EXAMPLE. 


Tr.  2.  I  have  received  from  Isaac  Hinman  20  Ibs.  of 
Butter  at  15  cents  a  pound,  and  two  Hams,  together  weighing 
44  Ibs.,  at  1 2£  cents  a  pound ;  and  I  have  sold  him  3  shanked 
Hoes  at  60  cents  each. 

Wednesday,  May  2d,  1860. 

Tr.  3.  Have  sold  to  Bronson  Fisher  20  Seamless  Bags 
at  22  cents  each ;  one  grain  Scoop  Shovel  at  one  dollar ;  and 

14  Ibs.  of  Rope  at  15  cents  a  pound. 

Thursday,  May  3d,  1860. 

Tr.  4.     Have  sold  to  James  Ellis  one  Pocket  Compass 
for  50  cents ;   2  pairs  of  Snuffers  at  37^  cents  each ;  and  a 
'    Pocket  Knife  worth  one  dollar. 

Tr.  5.     N.  O.  Morehouse  has  bought  of  me  2  Brooms  at 

15  cents  each ;  7  yards  of  Gingham  at  22  cents  a  yard ;  lOf 
yards  of  Blue  Drill  at  16  cents  a  yard;  and  2  Scythe  Stones 
at  10  cents  a  piece. 

Friday,  May  4th,  1860. 

Tr.  6.  A.  F.  Kingsley  has  bought  of  me  2  pairs  of  Spring 
Dividers  at  63  cents  a  pair ;  2  Trunk  Locks  at  31  cents 
each ;  and  one  Chest  Lock  worth  44  cents. 

Saturday,  May  5th,  1860. 

Tr.  7.  I  have  sold  to  Silas  Boomer  2  Dead  Locks  at  62£ 
cents  each ;  2  Cottage  Locks  at  $1.50  each ;  and  3  Trunk 
Locks  worth  35  cents  apiece. 

Monday,  May  7th,  1860. 

Tr.  8.  Bronson  Fisher  has  purchased  of  me  2  Sprinkling 
Pots  at  38  cents  each ;  one  Buck  Saw  worth  $1.00 ;  and  one 
Box  cf  8  x  10  Glass  worth  $2.25. 

Tr.  9.  James  Sterling  has  bought  of  me  two  Handsaw 
Files  at  10  cents  each;  one  set  of  Knives  and  Forks  for 
$1.15;  and  12  Ibs.  of  Lead  Pipe  at  8  cents  a  pound.  I  have 
received  of  him  one  quarter  of  Beef  weighing  210  Ibs.  at  5 
i  cents  a  pound. 

91 


GENERAL    BOOK-KEEPING. 


Tuesday,  May  8th,  1860. 

Tr.  10.  I  have  sold  to  H.  M.  Roberts  15  Ibs.  of  Brown 
Sugar  at  10  cents  a  pound,  and  7J  yards  of  Calico  at  16  cents 
a  yard.  I  have  bought  of  him  14  bushels  of  Potatoes  at  40 
cents  a  bushel. 

Thursday,  May  10th,  1860. 

Tr.  11.  I  have  sold  Isaac  Hinman  12  yards  of  Shirting 
at  12  J  c.  a  yard,  and  6|  yds.  of  Sheeting  at  9  c.  a  yd. 

134.  From  these  transactions  and  the  entries  based  upon 
them  in  the  annexed  Day  Book,  the  learner  will  at  once  see 
what  must  have  been  the  transactions  requiring  the  remaining 
Day  Book  entries.     As  an  exercise,  private  learners  and 
classes  may  profitably  examine  these  Day  Book  entries,  and 
state  or  write  out  in  common  language  the  transactions  upon 
which  they  are  based. 

135.  This  Illustrative  Example  commences  with  the  21st 
page  of  the  Day  Book,  and  continues  to  the  26th  page,  which 
we  will  call  Day  Book  A.     These  Day  Book  entries  are 
posted  to  pages  34,  35,  and  36  of  the  Ledger,  which,  as  we 
have  already  had  three  Ledgers,  we  will  call  Ledger  D. 

136.  Day  Book  entries  are  made  at  the  time  and  in  the 
order  of  occurrence  of  the  transactions  upon  which  they  are 
based.     The  figures  in  the  column  at  the  left  of  these  entries 
are  inserted  at  the  time  of  posting,  and  they  indicate  the 
pages  of  the  Ledger  to  which  the  entries  are  posted.     In  like 
manner  the  figures  at  the  left  of  the  money  columns  in  the 
Ledger  indicate  the  pages  of  the  Day  Book  from  which  the 
several  entries  to  an  account  have  been  posted. 

QUEST.  134.  What  do  the  transactions  stated,  and  the  entries  based  upon  them, 
show  ?  What  exercise  is  suggested  ?  — 135.  Where  does  the  illustrative  example 
introduced  commence,  and  what  space  does  it  occupy  ?  — 136.  When  are  Day  Book 
entries  made?  When  are  the  figures  at  the  left  of  these  entries  inserted,  and  what 
do  they  indicate?  What  do  corresponding  figures  in  the  Ledger  indicate  1 

92 


Sot, 


94 


34 


34 


34 


35 


35 


4.50     . 


45  c.     . 


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@  60  c. 


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VoveS 
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90 


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$4 


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45 


INDEX  TO   LEDGER  D. 


AB 


36 


CDE 


35 


M 


35 


NO 


F 


GH 


IJ 


36 


99 


PQ 


R 


3* 


35 


TUV 


WX  YZ 


3* 


2  $5 
53 

50 


96 

60 


50 


nman 


SO 


00 


40 


50 
50 


00 


J*/ 


27 


27 


00 


27    00 


*  D.  B.,  or  D.  only,  as  here  employed,  stands  for  Day  Book. 
100 


/a 


me* 


Balance 


fu 


30 


50 
7  00 

50 

25 


36 


3 
4  44 
2  43 
30 

90 


J'J' 


46 


50 
20 

20 

vo 


($60. 


30 


2 


2  34 

3  46 


35 


44 


42 


302 


Balance 


SO 


50 
90 
02 


9* 


101 


44 


44 


3  50 

45 


13.12 


NOTE.  The  learner  should  not  pass  from  the  examination  of  this  Illustrative  Exam- 
ple till  he  is  entirely  familiar  with  the  mode  of  entering  these  transactions  in  the 
Day  Book,  posting  them  into  the  Ledger,  and  closing  the  several  accounts.  When  he 
is  able  readily  to  answer  the  following  questions,  and  clearly  to  explain  the  processes 
required,  he  may  rest  assured  that  his  subsequent  progress,  if  equally  thorough,  will 
be  easy  and  satisfactory. 


QUEST.  136.  What  is  the  date  of  the  last  entry  posted  to  the  account  of  II.  M. 
Roberts?  What  are  the  items  of  this  entry?  How  is  the  amount  of  "Cash  to  Bal- 
ance" ascertained?  jK^Let  the  learner  answer  the  same  questions  in  relation  to 
the  accounts  of  Isaac  Hinman,  Bronson  Fisher,  and  N.  0.  Morehouse.  What  is  the 
date  of  the  last  entry  posted  to  the  account  of  A.  F.  Kingsley  ?  What  are  the  items 
of  this  entry  ?  What  is  the  date  of  the  last  entry  posted  to  the  account  of  James 
Ellis  ?  This  account  seems  to  be  balanced,  and  the  balance  brought  down,  June  30th 
What  is  the  Balance,  and  to  whom  is  it  due  ?  4®~  State  the  same  particulars  in 
relation  to  the  account  with  James  Sterling.  What  is  the  condition  of  the  account 
of  Silas  BoomerJ 

102 


EXAMPLES    FOR   PRACTICE. 


PROOF  OF  POSTINGS  AND  BALANCES. 
Day  Book  Drs,  and  Crs.,  June  SQtk,  1860. 

Dr.  Sums.  .  Cr. 


24 
22 
§3 

$6 
25 
26 


20 

69 

<&*.    «**,£>«,  ft 

46 

f* 

(t                  // 

42 

43 

//                  // 

4$ 

49 

/x                 // 

?$ 

24 

//                  // 

29 

62 

//                 // 

Balance  •      • 

~47~5 

$2 

4$  4O 

5O 
40 


14 


43 


Dr. 


Ledger  Balances,  June  30th,  1860. 


35 


302 


43 


46 


ttm** 

Balance  • 


ac 

35 


4  25 


14 


46 


j89 
44 


137.  Above  are  entered  the  Dr.  and  Cr.  sums  on  each 
page  of  the  preceding  Day  Book,  from  which  it  appears  tho 
Drs.  exceed  the  Crs.  $14.89,  as  shown  by  the  Balance. 
Now,  as  every  Dr.  sum  in  the  Day  Book  has  been  posted  to 
the  Dr.  side  of  the  Ledger,  and  as  every  Cr.  sum  in  the 
Day  Book  has  been  posted  to  the  Cr.  side  of  the  Ledger,  and 
as,  in  obtaining  the  Ledger  Balances,  equal  sums  have  in 
every  instance  been  omitted  from  each  side  of  an  account, 
the  difference  in  the  sums  of  the  Dr.  and  Cr.  Ledger  Balances 
should  exactly  equal  the  Day  Book  Balance.  As  this  is  so,  we 
conclude  the  Postings  and  Balances  of  the  Ledger  are  correct. 

137.   How  can  you  know  that  your  postings  and  Ledger  balances  are  correct! 
103 


GENERAL    BOOK-KEEPING. 


RETROSPECT  AND  PROSPECT. 

We  have  thus  far  considered  the  three  most  common  forms 
of  keeping  accounts  by  Single  Entry  Book-keeping. 

The  First  Form  presented  extends  from  the  24th  page 
to  the  59th,  in  the  discussion  of  which  all  the  leading  fea- 
tures of  the  science  are  explained  and  elucidated.  Then 
follow  Examples  for  Practice,  extending  from  the  60th  to  the 
71st  page,  in  the  course  of  which  the  principles  taught  are 
applied  to  the  ordinary  business  transactions  of  life. 

The  Second  Form  of  keeping  accounts  is  briefly  presented 
on  the  72d  and  four  following  pages,  (the  principles  of  the 
science  previously  taught  being  alike  applicable  to  this  form,) 
and  Examples  for  Practice  similar  to  the  preceding  are  then 
introduced,  extending  from  the  77th  to  the  85th  page.  These 
two  forms  of  keeping  accounts  are  adapted  to  the  wants  of 
persons  generally,  transacting  a  limited  business  of  almost  any 
kind ;  but  the  former  is  more  especially  adapted  to  agricul- 
tural, and  the  latter  to  manufacturing  pursuits,  as  has  already 
been  fully  explained.  In  each  of  these  two  forms  of  accounts, 
the  Ledger  is  the  only  account  book  required  for  use. 

A  Third  Form  of  recording  business  transactions,  which  is 
sometimes  called  the  Merchant's  Form,  is  introduced  on  the 
86th  page.  The  principles  taught  are  practically  applied  in 
an  Illustrative  Example  commencing  on  the  90th  page,  and 
concluding  with  a  new  and  reliable  methed  of  testing  the  ac- 
curacy of  Postings  and  Balances,  as  is  fully  exemplified  on 
the  last  preceding  page.  This  form  requires  the  use  of  a  Day 
Book  and  Ledger,  and  is  adapted  to  a  retail  trade.  In  Single 
Entry  it  only  remains  to  present  appropriate  Examples  for 
Practice  in  the  Third  Form.  These  completed,  Commercial 
Calculations,  the  Philosophy  and  Morals  of  Business,  and  the 
Science  of  Double  Entry,  are  respectively  considered. 

QUEST.  137.  State  the  substance" of  the  retrospect  and  prospect  given. 
104 


EXAMPLES    FOR   PRACTICE. 


EXAMPLES   FOR  PRACTICE. 

THIRD    FORM    OF   ACCOUNTS. 

138.  In  the  First  and  Second  Forms  of  Account  each 
example  consists  of  several  transactions  with  the  same  indi- 
vidual.    (See  pp.  60th  and  72d.)     But  in  the  Third  Form  of 
Accounts  the  transactions  of  the  day  are  intermingled,  being 
entered  in  the  Day  Book  at  the  time  and  in  the  order  of  their 
occurrence.     The  following  examples  consist  of  transactions 
with  twelve  persons.     These  transactions  should  be  entered 
in  the  Day  Book  prepared  to  accompany  this  volume,  after 
the  manner  of  those  already  given  in  the  Illustrative  Exam- 
ple, commencing  at  the  90th  page.     This  done,  they  should 
be  posted  into  the  Ledger  as  those  were,  according  to  the 
instructions  given  at  the  88th  page.     (Arts.  127  and  128.) 
These  transactions,  which  commence  with  the  month  of  May, 
1860,  continue  three  months. 

139.  Each  pupil  may  regard  himself  as  conducting  the 
business  here  recorded.     The  accounts  with  persons  are  en- 
tered according  to  the  instructions   given  in  Art.  37;   the 
account  with  Cash  according  to  those  given  in  Art.  45  ;  and 
the  accounts  with  Bills   Receivable  and  Bills  Payable  as 
directed  in  Art.  64.     Several  of  the  following  transactions 
will  require  an  entry  to  two  accounts,  as  is  indicated  at  Tr.  3. 
Sometimes  a  Dr.  or  a  Cr.  entry,  or  both,  will  be  required,  and 
at  the  same    time  an  entry  in  the  Bill  Book,  as  in  Tr.  2. 
The  learner  will  need  carefully  to  exercise  his  judgment  in 
determining  what  entries  are  required. 

QUEST.  138.  In  the  Fy-st  and  Second  Forms  of  Account,  of  what  does  each  exam- 
ple consist  ?  In  the  Third  Form  of  Accounts,  how  are  the  transactions  of  the  day 
recorded?  Of  what  do  the  examples  for  practice  in  this  form  of  accounts  consist? 
What  instructions  are  given  for  entering  these  transactions  in  the  Day  Book  and 
Ledger?  With  what  month  do  these  transactions  commence,  and  how  long  do  they 
continue?  —  139.  Who  conducts  this  business?  What  principle  do  we  observe  in 
keeping  accounts  with  persons  ?  (Art.  37.)  How  is  the  Cash  account  kept  ?  (Art.  45.) 
How  are  Bills  Receivable  and  Bills  Payable  and  accounts  kept  ?  (Art.  64.)  Do«l 
the  same  transaction  ever  require  an  entry  to  more  than  one  account  ? 

105 


GENERAL    BOOK-KEEPING. 


INVENTORY   OF  PROPERTY  IN  TRADE. 
Tuesday,  May  1st,  1860. 

140.  Store  and  Ware  House  worth  $4200.00 

Merchandise  in  Store, 3500.00 

Cash  in  Safe  and  Bank, 900.00 

James  Sill's  Note,  (No.  1,)  B.  B.  (Art.  147,)  225.00 
Henry  Hart  owes  me  on  acct.,     .     .     .         75.00 
James  Farley      do.  do.       ...         60.00 

Total  amount  of  my  assets, $8960.00 

/  owe  as  follows  : 

Isaac  Hill  for  Mdse.  on  acct.,      .     .     .     $260.00 
Note  (No.  1)  to  H.  Smith  for  Mdse., 

B.  B.,  (Art.  147,) 700.00 

Total  amount  of  my  debts, $960.00 

Net  Capital  in  Trade, $8000.00 

141.  Accounts  should  be  opened  with  Cash,  with  Bills 
Receivable  and  Bills  Payable,  and  with  every  person  who 
owes  us,  or  whom  we  owe  on  account,  at  the  time  of  com- 
mencing business.  (Art.  140.)     These  accounts  should  then 
be  debited  and  credited  from  time  to  time,  as  our  business 
transactions  shall  require.     We  should  seek  to  make  our 
Account  Books  tell  the  truth,  the  whole  truth,  and  nothing 
but  the  truth  relating  to  our  business. 

Wednesday,  May  2d,  1860. 

Transaction  1.  I  have  sold  Henry  Allen  80  Ibs.  of  Brown 
Sugar  at  8£  cents  a  pound ;  4  bbls.  of  Rock  Salt  at  $2.25  a 
barrel ;  and  20  Ibs.  of  Java  Coffee  at  20^  cents  a  pound. 

QUEST.  140.  What  amount  of  assets  have  I  on  commencing  business,  and  in  what 
do  they  consist  ?  What  is  my  indebtedness,  and  in  what  does  it  consist?  — 141.  What 
accounts  should  be  opened  at  the  time  of  commencing  business?  What  entries  should 
then  be  made  to  these  accounts  ?  What  should  our  Account  Books  tell  ? 

106 


EXAMPLES    FOR   PRACTICE. 


Tr.  2.  I  have  sold  and  delivered  Merchandise  to  Job  Otis 
to  the  amount  of  $75.00,  for  which  he  has  given  me  his  Note 
payable  at  my  store  June  25th,  1860.  (Bills  Receivable 
No.  2,  Dr.,  and  B.  B.  Art.  147.) 

Tr.  3.  James  Sill  has  taken  up  his  Note  of  Jan.  1st, 
payable  at  my  store  this  day.  (Bills  Receivable  No.  1,  Cr., 
and  Cash  Dr.) 

Friday,  May  Uh,  1860. 

Tr.  4.  O.  H.  Andrews  has  bought  of  me  3  bbls.  of  Salt 
at  $1.25  a  barrel,  and  31£  yds.  of  Sheeting  at  8£  cents  a 
yard.  I  have  received  of  him  4  Hams,  together  weighing 
70  Ibs.,  at  14  cents  a  pound. 

Tr.  5.  A.  B.  Lincoln  has  brought  me  44  bushels  of  Corn 
at  45  cents  a  bushel,  and  10  bushels  of  Wheat  at  95  cents  a 
bushel.  He  has  bought  of  me  8^  yds.  of  Cottonade  at  24  c.; 
4  Ibs.  of  Black  Tea  at  60  c,;  and  4  bbls.  of  Salt  at  $1.25. 

Saturday,  May  5th,  1860. 

TV.  6.  I  have  sold  to  S.  O.  Jenkins  10  yds.  of  Calico  at 
XHc.;  12  yds.  of  De  Laine  at  22  c.;  and  6  yds.  of  Franklin 
Drill  at  25  c.  He  has  furnished  me  with  18  Ibs.  of  Butter 
fct  20J-  c.  per  pound. 

Tr.  7.  A.  C.  Morton  has  bought  of  me  56  Ibs.  of  Crushed 
Sugar  at  11  c.  a  pound,  and  20£  Ibs.  of  Codfish  at  6  c.  a 


Monday,  May  1th,  1860. 

Tr.  8.  Nathan  Powers  has  bought  of  me  2  Scythes  at 
$1.10  earh,  and  one  Grain  Cradle  for  $2.50. 

Tr.  9.  I  have  sold  John  Ransom  2  pairs  of  Boots  at 
$3.50  a  pair;  8  Milk  Pans  at  40  c.  each;  and  40  yds.  Three 
Ply  Carpeting  at  80  c.  a  yard. 

Tuesday,  May  8th,  1860. 

Tr.  10.     I  have  accepted  and  paid  in  Merchandise  John 
Coope/'s  Order  on  me  in  favor  of  John  Smith  for  $40.00. 
37.) 

107 


GENERAL    BOOK-KEEPING. 


TV.  11.  I  have  bought  of  Henry  Smith  on  acct.  a  Bill 
of  Merchandise  as  per  Invoice  No.  1,  amounting  to  $200.00. 

Tr.  12.  I  have  paid  my  Note  No.  1  of  Feb.  8,  given  to 
H.  Smith  for  Merchandise,  mentioned  in  the  Inventory  of 
May  1st.  The  Note  was  for  $700.00.  (Bills  Payable  Dr. 
and  Cash  Cr.) 

Thursday,  May  10th,  1860. 

Tr.  13.  I  have  paid  Isaac  Hill  $225.00  on  acct.  of  Mdse, 
bought  of  him,  mentioned  in  the  Inventory  of  May  1st,  and 
I  have  bought  of  a  Pedler  sundry  articles  of  Mdse.  amount- 
ing to  $25.00,  which  I  pay  for  in  Cash. 

Saturday,  May  12th,  1860. 

Tr.  14.  I  have  sold  Job  Otis  Merchandise  as  per  Sales 
Book,*  page  4,  amounting  to  $265.00,  for  which  I  have  re- 
ceived his  Note  payable  in  30  days.  (Bills  Rec.  No.  3.) 

Tr.  15.  The  receipts  of  Cash  for  small  sales,  as  per 
Money  Drawer,  and  not  otherwise  entered,  have  been  $25.00. 

Tuesday,  May  15th,  1860 

Tr.  16.  I  have  sold  to  Ellen,  daughter  of  James  Farley, 
on  her  father's  account,  one  De  Laine  Shawl  for  $5.00,  and 
30  yds.  of  Gingham  at  25  c.  a  yard. 

Tr.  17.  I  have  bought  Merchandise  of  Henry  Smith,  as 
per  Invoice  No.  2,  amounting  to  $225.00,  for  which  I  have 
given  him  my  Note,  payable  the  4th  day  of  June  next. 
(Bills  Pay.  No.  2.) 

Tr.  18.  O.  II.  Andrews  has  bought  of  me  one  Suit  of 
Clothes  for  $34.00;  one  China  Tea  Set  for  $13.00;  32  yds. 
of  Carpeting  at  80  c.;  and  6£  yds.  of  Stair  Carpet  at  60  c. 

*  The  quantity  and  price  of  the  articles  sold  should  be  entered  at  length  in  the 
Sales  Book.    They  are  here  omitted  because  of  the  space  they  would  occupy. 

106 


EXAMPLES    FOR    PRACTICE. 


Friday,  May  ISth,  1860. 

Tr.  19.  I  have  procured  for  S.  O.  Jenkins  one  Side 
Saddle  worth  $20.00,  and  one  Single  Harness  worth  $24.00, 
which  I  furnish  him  on  account. 

Tr.  20.  A.  B.  Lincoln  has  purchased  of  me  4  Cast  Steel 
Hoes  at  75  c.  each ;  2  Grain  Cradles  at  $2.25 ;  and  4  Hay 
Rakes  at  15  c.  each. 

Monday,  May  21st,  1860. 

Tr.  21.  A.  C.  Morton  has  bought  of  me  12J-  yds.  of 
Gingham  at  30  c.,  and  3  pairs  of  Cotton  Hose  at  28  c.  I 
have  paid  his  Order  on  me  of  this  date  for  $65.00,  in  Mdse. 

Tr.  22.  Nathan  Powers  has  purchased  of  me  28  yds.  of 
Sheeting  at  9£  c.  a  yard;  5  yds.  of  Brown  Linen  at  31  c.; 
and  If  doz.  Buttons  at  8  c.  per  dozen. 

Tr.  23.  I  have  sold  to  John  Ransom  7  yds.  of  Checked 
Gingham  at  30  c. ;  2  pairs  of  Cotton  Hose  at  50  c. ;  and  2  pairs 
of  Half  Hose  at  31  c.  The  goods  were  delivered  to  his 
daughter  Mary. 

Friday,  May  25th,  1860. 

Tr.  24.  I  have  bought  of  Henry  Smith  a  Bill  of  Mdse. 
on  acct.,  as  per  Invoice  No.  3,  amounting  to  $140.25 ;  and  I 
have  paid  him  $150.00  in  Cash  on  account. 

Tr.  25.  I  have  sold  John  Cooper  30£  yds.  of  Brown 
Sheeting  at  10  c.  a  yard,  and  9^-  yds.  of  Alpaca  at  80  c.  a  yd. 

Friday,  June  1st,  1860. 

Tr.  26.  Received  of  Jacob  Johnson  $275.40  for  a  Bill  of 
Goods  sold  him  this  day,  as  per  Sales  Book,  p.  6. 

Tr.  27.  I  have  sold  Merchandise,  as  per  Sales  Book,  p.  8, 
to  John  Wood,  amounting  to  $350.60,  for  which  I  have  re- 
ceived his  Note,  payable  the  9th  of  June.  (Bills  Rec.  No.  4-,) 

Tr.  28.  Henry  Hart  has  bought  of  me  one  Coffee  Mi?l  at 
88  c. ;  one  pair  of  Kip  Boots  for  $4.00 ;  and  20  Seamless 

Bags  at  25  c.  each. 

10  109 


GENERAL    BOOK-KEEPING. 


Monday,  June  4th,  1860. 

Tr.  29.  I  have  taken  up  my  Note  to  H.  Smith  for  $225.0fy 
this  day  due.  (Bills  Payable  No.  2,  and  Cash.) 

Tr.  30.  I  have  sold  to  Henry  Allen  4£  gallons  of  Molas- 
ses at  56  c.,  and  26J-  Ibs.  of  Bar  Soap  at  8  c. 

Wednesday,  June  6th,  1860. 

TV.  31.  O.  H.  Andrews  has  bought  of  me  3  yds.  of  Cassi- 
mere  at  $1.75  a  yd.,  and  8  yds.  of  Russia  Sheeting  at  37£  c.  a  yd. 

Tr.  32.  I  have  bought  of  Henry  Smith  a  Bill  of  Mer- 
chandise on  acct.,  as  per  Invoice  No.  4,  amounting  to  $280.00. 

Saturday,  June  9th,  1860. 

Tr.  33.  John  Wood  has  paid  his  Note  of  $350.60,  this 
day  due.  (Bills  Rec.  No.  4,  and  Cash.) 

Tr.  34.  James  Farley  has  bought  of  me  44 £  Ibs.  of 
Sugar  at  10  c.  per  pound;  3  Ibs.  of  Saleratus  at  8  c.;  and 
27  yds.  of  Cotton  Cloth  at  9  c. 

Tuesday,  June  12th,  1860. 

Tr.  35.  I  have  bought,  on  account,  a  Bill  of  Merchandise 
of  Isaac  Hill,  as  per  Invoice  No.  5,  amounting  to  $275.66. 

Tr.  36.  Job  Otis  has  paid  his  Note  of  $265.00,  this  day 
due.  (B.  R.  No.  3,  and  Cash.) 

Thursday,  June  l±th,  1860. 

Tr.  37.  Henry  Allen  has  bought  of  me  8  Ibs.  of  Raisins 
at  18f  c.,  and  41^-  yds.  of  Sheeting  at  10  c. 

Tr.  38.  S.  O.  Jenkins  has  bought  of  me  8  Ibs.  of  Java 
Coffee  at  18J  c.,  and  25  Ibs.  of  Coffee  Sugar  at  10  c. 

Saturday,  June  IQth,  1860. 

Tr.  39.     The   receipts   of  Cash  for   small   sales,  as  per 
Money  Drawer,  and  not  otherwise  entered,  have  been  $24.50. 
Tr.  40.     I  have  sold  to  Henry  Hart  one  barrel  of  Flour 
for  $6.50,  and  40  Ibs.  of  Sugar  at  9£  c.  a  pound. 

110 


EXAMPLES    FOR    PRACTICE. 


Tr.  41.  I  have  bought  Merchandise  of  Sam  Brown  as 
per  Invoice  No.  6,  amounting  to  $360.00,  for  which  I  have 
given  him  my  Note,  payable  the  20th  of  July. 

Monday,  June  IStk,  1860. 

Tr.  42.  I  have  received  $235.50  in  Cash,  for  Merchan- 
dise sold,  as  per  Sales  Book,  p.  10. 

Tr.  43.  I  have  sold  a  Bill  of  Merchandise  to  John  Wood, 
as  per  Sales  Book,  p.  12,  amounting  to  $269.50,  for  which  he 
has  given  me  his  Note,  payable  the  2d  of  July. 

Tr.  44.  I  have  this  day  settled  my  Book  Acct.  with  Isaac 
Hill,  and  given  him  my  Note  at  30  days  to  balance.  For 
what  amount  was  the  Note  given  ?  Ans.  $310.66. 

Friday,  June  22d,  1860. 

Tr.  45.  A.  B.  Lincoln  has  bought  of  me  2  bbls.  of  Coarse 
Salt  at  $2.30  a  barrel. 

Tr.  46.  F.  Sill  presents  an  Order  on  me  drawn  and 
signed  by  A.  C.  Morton,  requesting  the  payment  to  him  of 
$25.00  in  goods,  which  I  have  accepted  and  paid. 

Monday,  June  25th,  1860. 

Tr.  47.  Job  Otis  has  paid  his  Note  of  $75.00,  given  the 
2d  of  May,  and  this  day  due.  (B.  R.  No.  2,  and  Cash.)  * 

Wednesday,  June  27th,  1860. 

Tr.  48.  A.  C.  Morton  has  bought  of  me  6f  yds.  of  Sheet- 
ing at  9  c.  a  yard,  and  2f  yds.  of  Cassimere  at  $2.00  a  yard. 

Tr.  49.  Nathan  Powers  has  bought  of  me  3^  yds.  black 
Cambric  at  12  c.;  2  Linen  Handkerchiefs  at  35  c.;  and  12 
Ibs.  of  Java  Coffee  at  17  c.  per  pound. 


*  In  several  instances,  as  in  this  case,  parenthetical  references  have  been  made, 
with  a  view  of  suggesting  to  the  learner  the  entries  that  aro  required.  But  he  should 
now  be  prepared  to  enter  his  transactions  without  such  aid ;  and  the  sooner  he  does 
BO  the  better. 

Ill 


GENERAL    BOOK-KEEPING. 


Friday,  June  23th,  1860. 

Tr.  50.  I  have  sold  to  John  Cooper  8  Ibs.  of  Brown 
Sugar  at  10  c.  a  lb.,  and  12  Ibs.  of  Candles  at  14^  c.  a  Ib. 

Tr.  51.  I  have  sold  to  John  Ransom  3  pairs  of  Cotton 
Hose  at  50  c.;  2  pairs  of  Kid  Buskins  at  $1.50 ;  and  If  doz. 
Buttons  at  6  c. 

Tr.  52.  I  have  bought  of  Henry  Hart  4  doz.  Hens'  Eggs 
at  16  c.  a  dozen,  and  8  Hams,  together  weighing  160  Ibs.,  at 
12  c.  per  pound. 

Saturday,  June  30th,  i860. 

142.  The  preceding  transactions  having  been  entered  in 
the  Day  Book  and  posted  to  the  Ledger,  according  to  instruc- 
tions already  given,  (Arts.  118  to  136,)  the  student  will  test 
the  accuracy  of  his  postings  and  balances;  (Art.  137.)  In 
case  the  Day  Book  entries  have  been  correctly  made,  and  the 
Ledger  postings  and  balances  are  free  from  mistakes,  there 
will  exist  the  following 


PROOF  OF  POSTINGS  AND  BALANCES. 
Day  Book  Drs.  and  Ors.,  June  30th,  1860. 

Dr.  Sums.  Cr.  Sums. 


The  Dr.  sum  re- 
sulting from  adding 
all  the  Dr.  entries 
for  May  and  June 
will  be 


$5767.43 


The  Cr.  sum  re- 
sulting from  adding 
all  "the  Cr.  entries 
for  May  and  June 
will  be  .... 

Balance    .     . 


$5054.80 


.      712.63 

$5767.43 


QUEST.  142.  What  instruction  is  given  in  Article  142? 
112 


EXAMPLES    FOR   PRACTICE. 


The  Dr.  and  Cr.  sums  upon  the  different  pages  of  the  Day 
Book  will  depend  upon  the  number  of  transactions  entered 
upon  a  page ;  but  the  sum  total  of  Day  Book  Drs.  and  Crs« 
and  the  balance  will  be  as  indicated  at  the  foot  of  the  opposite 
page.  As  that  Balance  agrees  with  the  Balance  of  the 
Ledger  accounts  given  below,  we  conclude  the  work  is  right. 


eu 


75 

79 
30 


40$ 


50 
53 


60 

09 
JY 
52 


670 


4-70. 
712 


66 

SO 
25 
63 


143.  If  these  results  are  obtained  the  student  may  con- 
sider his  work  right ;  but  in  case  they  are  not  obtained  he 
should  review  his  work.  The  closing  balances  should  be 
entered  under  date  of  June  30th,  to  indicate  the  condition  of 
the  Ledger  at  the  end  of  June.  These  balances  should  be 
brought  down  under  date  ot  July  2d,  (the  month  coming  in 
on  Sunday,)  to  represent  the  state  of  the  Ledger  accounts  at 
the  beginning  of  July. 

QUEST.  143.   When  should  the  work  be  reviewed?    Under  what  date  should  the 
closing  balances  be  entered,  and  under  what  date  should  they  be  brought  down  ? 
10*  113 


GENERAL   BOOK-KEEPING. 


Monday,  July  2d,  1860. 

Tr.  53.  I  have  taken  a  commission  to  buy  Wool  fot 
Isaac  Hill.  He  is  to  furnish  me  money  to  buy  with,  and  to 
pay  me  one  cent  a  pound  for  my  services  in  buying,  storing, 
and  shipping.  He  furnishes  me  with  $1200.00  now,  and 
is  to  furnish  me  more  money  as  I  may  need  it. 

Tr.  54.  John  Wood  has  paid  his  Note  of  $269.50,  this 
day  due.  (B.  R.  No.  5,  and  Cash.) 

— SjPp"  Tuesday,  July  3d,  1860. 

Tr.  55.  James  Farley  has  bought  of  me  2  Straw  Hats  at 
37  J  c.  each,  and  4  Ibs.  of  Corn  Starch  at  12  c.  per  pound. 
He  has  brought  me  190  Ibs.  of  Wool,  on  account,  at  40  c.  a 
pound. 

Thursday,  July  5th,  1860. 

Tr.  56.  Henry  Allen  has  bought  of  me  one  Grain  Cradle 
at  $2.50,  and  2  Scythes  at  88  c.  each.  He  has  brought  me 
on  account  165  Ibs.  Wool  at  40  c.  a  pound. 

Tr.  57.  Nathan  Powers  has  bought  of  me  4  Ibs.  of  Wool 
Twine  at  16  c.  a  pound,  and  18  Ibs.  of  Brown  Sugar  at  9  c. 

Friday,  July  6th,  1860. 

Tr.  58.  John  Ransom  has  bought  of  me  4  Ibs.  of  Wool 
Twine  at  16  c.  per  pound,  and  2  pairs  of  Sheep  Shears  at 
$1.25  a  pair.  He  has  brought  me,  on  account,  24  Ibs.  of 
Butter  at  14  c. 

Monday,  July  $th,  1860. 

Tr.  59.  Nathan  Powers  has  brought  me  245  Ibs.  of  Wool, 
on  account,  at  42  c.  a  pound.  He  has  bought  of  me,  on 
account,  2  Cedar  Pails  at  75  c.  each ;  10£  Ibs.  of  Sugar  at  10  c. 
a  pound;  and  1  doz.  Blue  Plates  for  $1.00. 

Thursday,  July  12th,  1860. 
Tr.  60.     I  have  bought  two  lots  of  Wool  for  Cash;  one 

1U 


EXAMPLES    FOR   PRACTICE. 


lot  of  540  Ibs.  of  O.  White  at  43  c.  a  pound,  and  the  other  lot 
of  600  Ibs.  of  H.  Brown,  at  the  same  price  per  pound. 

Tr.  61.  I  have  received  of  Isaac  Hill  $1800.00  in  Cash 
to  buy  Wool  with.  (Transaction  53.) 

Tr.  62.  I  have  received  of  A.  B.  Lincoln,  on  account, 
250  Ibs.  of  Wool  at  44  c.;  18  Ibs.  of  Butter  at  14  c.;  and  4 
doz.  Hens'  Eggs  at  15  c. 

Saturday,  July  Uth,  1860. 

Tr.  63.  John  Cooper  has  brought  me  425  Ibs.  of  Wool, 
on  account,  at  45  c.  a  pound,  according  to  agreement. 

Tr.  64.  O.  H.  Andre ws  has  brought  me,  on  account,  980 
Ibs.  of  Wool  at  45  c.  a  pound.  He  has  bought  of  me  one 
remnant  of  Edging  for  25  c. ;  9T5F  Ibs.  of  Codfish  at  7  c.  a 
pound ;  and  32  yds.  of  Calico  at  15  c. 

Monday,  July  16th,  1860. 

Tr.  65.  I  have  bought  of  Henry  Smith,  on  acct.,  a  Bill 
of  Mdse.  amounting  to  $475.00,  as  per  Invoice  No.  7. 

Tr.  66.  I  have  bought  of  A.  C.  Morton,  on  account,  440 
Ibs.  of  Wool  at  42  c.  a  pound.  I  have  sold  him  14  Ibs.  of 
Java  Coffee  at  15  c.  a  pound ;  25  Ibs.  of  Brown  Sugar  at 
9  c.  a  pound ;  and  I  have  paid  the  balance  due  him  in  Cash. 
How  much  money  did  he  receive?  Ans.  $72.36. 

Tr.  67.  James  Farley  has  brought  me  460  Ibs.  of  Wool, 
for  which  I  allow  him  45  c.  a  pound.  We  settle  our  account, 
and  I  give  him  my  Note  to  balance.  For  what  amount  is 
my  Note  given  ?  Ans.  $202.15. 

Wednesday,  July  18th,  1860. 

Tr.  68.  I  pay  my  Note,  No.  4,  of  $310.66,  this  day  due 
to  Isaac  Hill  at  the  Exchange  Bank. 

Friday,  July  20th,  1860. 

Tr.  69.  I  pay  my  Note,  No.  3,  of  $360.00,  given  to  S, 
Brown  June  16th,  and  this  day  due. 

115 


GENERAL    BOOK-KEEPING. 


TV.  70.  Henry  Hart  has  brought  me  196  Ibs.'  of  Wool 
at  40  c.  a  pound.  We  settle,  and  I  pay  him  the  balance  his 
due  in  Coffee  at  16c.  a  pound.  How  many  Ibs.  of  Coffee 
does  he  receive  ?  Am.  19£  Ibs. 

Saturday,  July  21st,  1860. 

TV.  71.  S.  O.  Jenkins  has  sent  me  450  Ibs.  of  Wool, 
with  the  request  that  I  place  the  same  to  his  credit  at  42  c. 
per  lb.,  as  per  agreement,  which  I  do. 

TV.  72.  I  have  bought  three  lots  of  Wool,  as  follows : 
No.  1,  680  Ibs.  at  40  c. ;  No.  2,  951  Ibs.  at  40  c. ;  and  No.  3, 
720  Ibs.  at  40J-  c. ;  for  all  of  which  I  have  paid  the  Cash. 

Monday,  July  23c?,  1860. 

TV.  73.  I  have  bought  for  Isaac  Hill,  under  my  com- 
mission of  July  2d,  (Transaction  53,)  7281  Ibs.*  of  Wool,  for 
which  I  have  paid  $3080.55.  I  have  this  day  sent  him  the 
Wool,  with  a  statement  of  its  cost,  and  charged  him  for  the 
same,  and  for  my  services,  as  per  agreement  referred  to. 

Tuesday,  July  24^,  1860. 

TV.  74.  Henry  Allen  has  bought  of  me  10  gallons  of 
Molasses  at  44  c.,  and  45  Ibs.  of  Brown  Sugar  at  lOc.  We 
settle,  and  I  pay  him  the  balance  his  due  in  Cash.  How  much 
money  does  he  receive?  Ans.  $22.65. 

Wednesday,  July  25th,  1860. 

TV.  75.  I  have  settled  with  O.  H.  Andrews,  and  paid 
him  the  money  for  the  balance  his  due.  How  much  do  I 
pay  him  ?  Ans.  $353.92. 

Ttmrsday,  July  2Qth,  1860. 

TV.  76.  I  have  this  day  received  a  letter  from  Isaac  Hill, 
acknowledging  the  receipt  of  Wool  and  my  statement  of  July 
23d.  He  expresses  his  entire  satisfaction  with  the  quality  of 
Wool,  and  the  prices  I  have  paid,  and  encloses  the  balance 
my  due  on  account,  which  I  pass  to  his  credit.  How  much 
money  does  he  send  me  ?  Ans.  $153.36. 

*  See  note  on  page  228.  H<i 


EXAMPLES    FOR   PRACTICE. 


Friday,  July  27th,  1860. 

Tr.  77.  I  have  sold  to  S.  O.  Jenkins  one  Grain  Scoop 
Shovel  for  $1.25,  and  3  gallons  of  Lamp  Oil  at  $1.75  per 
gallon. 

Saturday,  July  28th,  1860. 

Tr.  78.  I  have  sold  a  Bill  of  Merchandise  to  James  Sill 
amounting  to  $254.60,  as  per  Sales  Book,  p.  18,  for  which  I 
have  received  his  Note,  No.  6,  payable  at  the  Exchange 
Bank  the  10th  of  August. 

Tr.  79.  I  have  settled  with  John  Cooper,  and  paid  the 
balance  due  him  in  Cash.  How  much  was  I  in  his  debt? 

Ans.  $138.06. 
Monday,  July  30th,  1860. 

Tr.  80.  S.  O.  Jenkins  has  brought  an  order  on  me  from 
Henry  Smith  for  $200.00  payable  in  Merchandise,  which  I 
accept;  but  as  he  does  not  want  his  pay  to-day,  I  make 
the  proper  entries  to  the  accounts  of  the  parties  to  the 
transaction. 

Tuesday,  July  31st,  1860. 

144.  The  preceding  business  has  been  conducted  three 
months,  and  I  now  wish  to  have  a  General  Settlement,  (Art. 
67,)  and  to  determine  my  gain  or  loss  for  this  tune.  For 
this  purpose  I  take  an  Inventory  of  Merchandise  in  Store, 
(Art.  146,)  which  amounts  to  $3675.00.  The  value  of  the 
Store  and  Warehouse  is  the  same  as  stated  in  the  Inventory, 
May  1st.  (Art.  140.)  I  wish  to  determine  three  things*. 

1st.  In  what  my  Assets  and  Liabilities  consist ; 

2d.  How  much  I  am  worth  as  appears  from  the  Inventory 
and  my  Ledger  Accounts  ;  and, 

3d.  Whether  I  have  made  or  lost  money  during  the  three 
months  I  have  been  in  trade,  and  how  much. 


144.  For  what  length  of  time  has  this  business  been  conducted?    Whai 
three  things  do  .you  wish  to  determine  ? 

in 


GENERAL    BOOK-KEEPING. 


145.  The  student  should  first  test  the  correctness  of  hw 
postings  and  balances  for  July,  (Arts.  142  and  143.)  In 
obtaining  the  Day  Book  Drs.  and  Crs.  to  June  30th,  there 
was  a  Dr.  excess  of  $712.63;  and  there  was  the  same  Dr. 
excess  in  the  Ledger  Balances  of  that  date.  As  this  Dr. 
excess  of  the  Ledger  Balances  is  carried  forward  and  enters 
into  the  Balances  of  July  31st,  it  becomes  necessary  to  enter 
the  same  sum  at  the  left  hand,  as  the  Dr.  Day  Book  Balance 
at  the  beginning  of  July. 


PROOF   OF  POSTINGS  AND  BALANCES. 
Day  Book  Drs.  and  Crs.,  July  31st,  1860. 


Dr.  Sums. 


Cr.  Sums. 


tune   36 

/ 

let 


74263 
$53357 


Balance 


601 


Dr. 


Ledger  Balances,  July  Slst,  1860. 


47$ 2  04 

25460 
50  30 


9* 


f/*)  ,        0 

QTmitSt, 
Balance  . 


Or. 


332 


745 
601 


45 

90 


25 
51 

~94 


QUEST.  145.  What  use  do  you  make  of  the  Day  Book  balance  for  June  in  obtain 
big  the  proof  for  July  ? 

118 


EXAMPLES    FOR   PRACTICE. 


INVENTORY  OF  PROPERTY  IN  TRADE. 
Tuesday,  July  31st,  1860. 

146.  Store  and  Warehouse,  worth  $4200.00 
Mdse.  in  Store,  per  Inventory,  .  .  .  3675.00 
Cash  on  hand,  per  Ledger,  ....  1782.01 
Bills  Receivable,  per  Ledger  and  B.  B.,  254.60 
John  Ransom  owes  me  on  Account,  .  50.30 

Total  amount  of  my  assets,        ....       $9961.91 


/  owe  as  follows : 

Bills  Payable,  per  B.  B.  and  Ledger,  $202.15 

S.  O.  Jenkins,  on  Account,     ....  332.90 

A.  B.  Lincoln,           do 120.22 

Nathan  Powers,        do 84.88 

Henry  Smith,            do 745.25 

Total  amount  of  my  Debts,       .... 

Net  Capital,  July  31st,  1860,    .... 
"         "         May  1st,     «          .... 

Have  made  in  Trade,  • 


$1485.40 

$8476.51 
8000.00 

$476.51 


The  Inventory  of  a  person's  property  does  not  strictly 
belong  to  either  Day  Book  or  Ledger.  It  should,  however, 
be  regularly  taken  and  carefully  entered  in  the  Memorandum 
Book,  where  it  becomes  a  matter  of  permanent  record. 
(Arts.  71  to  77.)  Inventories  thus  made  and  kept,  in  con- 
nection with  one's  account  books,  present  a  complete  history 
of  his  business  for  a  series  of  years,  which  sometimes  becomes 
a  matter  of  importance. 


QUEST.  146.  Does  the  Inventory  of  one's  property  belong  to  his  Day  Book  or 
Ledger  ?  When  should  it  be  taken,  and  where  should  it  be  entered  ?  What  is  salt, 
•f  a  history  of  one's  business  ? 

119 


©*£*,  w  J^ 

No. 

Date.         1 

Maker's  Name. 

Indorser's  Name. 

J> 

/an. 
y 
or 

1 

£ame<t-   Qrwi 
p-  /?      SW£    J 

oAfone 

5 

(7**' 

^ 

or  />     sw&     / 
Z-cfon,    sroocC' 

Qfon* 

6 

s* 

" 

^famed   Qrdt 

(7 

Gfa»   ^  2&& 

No. 

Date. 

Payee's  Name. 

Indorser's  Name. 

/ 

| 

45 

tyfaswi/u   Q/wittfi, 
cz/c&wiw   Q/'Wit'fn, 

^^OOK-   £\     sjf/nit& 
& 

J" 

/— 

46 

^™^S 

<%oo£  fi'Wte* 

J 

^ 

46 

/atne*   &a*fy 

e/Km* 

147.   At  the  time  these  Notes  were  received  and  given  all 
of  the  above  entries  were  made,  except  those  under  the  head 
of  "  Remarks."     These  were  entered  as  the  Bills  were  paid. 
Bill  Receivable  No.  6  is  not  due  at  the  time  of  my  General 

Settlement,  July  31st.     The  same  is  true  of  Bill  Payable 

QUEST.  147.  What  entries  should  be  made  in  the  Bill  Book  at  the  time  Notes  are 

fiiven  and  received  ?     What  Notes  entered  in  the  above  Bill  Book  are  not  due  ? 

120 

£%ece^a//e. 

Where  Payable. 

When  due. 

Amount. 

Remarks. 

**<*,' 

2; 

2 

$225 

00 

&btc£  Q^au  2 

06. 

/ttne 

25 

75 

00 

'c/aia  Jwne  25 

<&. 

" 

42 

265 

00 

gfa^^une  42 

<Jo. 

// 

9 

350 

60 

gPatct^Mie  9 

do. 

fafy 

2 

269 

50 

&a,ut  'fafy  2 

°* 

40 

254 

60 

a^a 

Where  Payable. 

When  due. 

Amount. 

Remarks. 

£.«*/ 

'£, 

$ 

jroo 

00 

0M  ^    , 

do. 

fane 

4 

225 

00 

&at^fane  4 

'Qss&if   Q/tote 

J-uvu 

20 

360 

00 

&a<^fafy  20 

&&c.   &ja/?t'K> 

« 

4$ 

340 

66 

&at^/u/y   4$ 

Qdua. 

202 

No.  5.     There  is,  therefore,  no  occasion  for  an  entry  to  either 
under  the  head  of  "  Remarks."     When  these  Notes  mature 
the  proper  entries  should  be  made  under  this  head,  showing 

whether  they  have  been  paid,  or  renewed,  or  otherwise  dis- 

posed of,  and  how. 

QUEST.  147.   When  these  notes  mature  what  entries  should  be  made  ?    Does  this 

statement  agree  with  your  Ledger  account? 

11                              121 

! 

GENERAL    BOOK-KEEPING. 


AUXILIARY  BOOKS. 

148.  It  has  already  been  stated  that  in  the  Third  Form 
of  Accounts  two  principal  books  are  used.     These  are  the 
Day  Book  and  the  Ledger.     (Art.  117.) 

149.  AUXILIARY  BOOKS  are  assisting  or  helping  books. 
The  most  important  of  these  are,  the  Cash  Book,  the  Bill 
Book,  and  the  Memorandum  Book,  which  have  already  been 
described ;  to  which  may  be  added  the  Letter  Book,  the  In- 
voice Book,  and  the  Sales  Book. 

150.  The  CASH  BOOK  is  a  book  in  which  is  kept  an 
account  of  all  moneys  received,  and  of  all  moneys  paid  out. 
(For  the  manner  of  keeping  the  C.  B.,  see  Arts.  45  to  47.) 

151.  The  BILL  BOOK  is  a  book  in  which  is  kept  a  memo- 
randum of  Notes,  Bills  Receivable,  Bills  Payable,  and  Bills 
of  Exchange.     (For  a  fuller  description  of  the  Bill  Book,  and 
the  manner  of  keeping  it,  see  Arts.  60  and  147.) 

152.  The  MEMORANDUM  BOOK  is  used  for  recording 
memorandums  of  various  kinds,  agreements,  and  all  important 
particulars  relating  to  a  person's  business  that  belong  neither 
to  the  Day  Book  nor  Ledger.     (For  a  full  description  of  the 
Memorandum  Book,  see  Arts.  71  to  77.) 

153.  The  LETTER  BOOK  contains  copies  of  all  business 
letters,  which  ought  always  to  be  written  in  a  neat  and  legible 
hand,  and  to  be  as  clear  and  concise  as  possible.     By  using 
a  Copying  Machine  much  labor  may  be  saved  in  keeping  this 
book,  and  at  the  same  time  perfect  accuracy  secured.    Copies 
of  letters  thus  taken  afford  better  evidence  before  a  legal 
tribunal,  than  the  most  perfect  copies  made  with  the  pen. 
The  Letter  Book  should  contain  copies  of  all  important  busi- 
ness letters. 

QUEST.  148.  What  are  the  two  principal  books  in  the  Third  Form  of  Accounts?  — 
149.  What  are  auxiliary  Books  ?  What  are  the  most  important  of  them  ?  —  150. 
What  is  the  Cash  Book?  — 151.  What  is  the  Bill  Book?  — 152.  For  what  is  the 
Memorandum  Book  used  ?  — 153.  What  does  the  Letter  Book  contain  ?  How  ought 
letters  to  be  written  ?  What  of  a  copying  machine  ?  What  of  evidence  in  courts  ? 

122 


LETTER-WRITING. 


154.  Good  letter-writing  is  a  fine  accomplishment.  The 
following  specimen  is  therefore  subjoined  for  the  purpose  of 
exhibiting  the  date,  (1,)  address,  (2,)  body  of  the  letter,  (3,) 
subscription,  (4,)  inscription,  (5,)  and  superscription,  (6.) 

LETTER  OP  INTRODUCTION. 


(2) 

(3)    od/tow  me  to  introduce  to 

C7L&U46  fnu  y&ttny  attend,    Q/tmctnw  Q/ttM-tu,  oa  tnw  city,  wno 

ff    y         </  &  ff  ff       v  ff 


uiina  a 
<7 

* 

and  ovedi&nce  04  a  &on  / 

IS 

and  attainments  04  a  student  /    oj-  nu    Jizov&tviai   nonedty-  and 

titan  4uc&  a   fiewon  aa  won,  wiit  ve   fiieaiied  to  emfitoif,  t^n    cade 
/  ff  f  f     ff 

you  need  additional £e/fi>  /    and  Qs  tnezeflote  tatee  ateat 

(7  I  .  ff  </  ' 

'/n  inttoducina  £im  to  you^  /avott 
//  0         i/ 

(4)  Qs  temain,, 


Qfiia  G<$ay£ew. 


QUEST.  154.  What  is  said  of  good  letter-writing  ?  For  what  purpose  is  a  speci- 
men of  letter-writing  introduced  ?  Do  the  traits  of  character  attributed  to  the  person 
described  in  this  letter  of  introduction  entitle  him  to  confidence  and  esteem  ?  What 
are  some  of  these  traits  of  character  ? 

123 


GENERAL    BOOK-KEEPING. 


155.  Below  is  exhibited  the  correct  form  of  a  letter  when 
folded.  The  superscription  (6)  should  occupy  the  lower  half 
of  the  letter  or  envelope,  both  on  account  of  its  appearance, 
and  the  convenience  of  post-marking  at  the  office.  Postage 
is  now  generally,  and  very  properly,  pre-paid. 


156.  The  INVOICE  BOOK  is  a  book  kept  by  many  mer- 
chants, into  which  are  copied  all  Invoices,  or  Bills  of  Goods 
purchased.     But  this  requires  much  labor  in  copying,  and  is 
really  of  little  use ;   for  in  case  of  any  difficulty  with  the 
seller,  it  is  necessary  to  refer  to  his  own  list,  and  not  to  a 
copy  of  it.     Invoices  should  be  carefully  compared  with  the 
goods  actually  received,  so  that  in  case  of  disagreement  any 
error  may  be  corrected,  and  then  placed  on  file  for  future 
reference,  as  occasion  shall  require.     When  found  correct, 
they  should  be  entered  in  the  Day  Book,  to  the  credit  of  the 
person  of  whom  the  goods  have  been  received,  as  in  case  of 
credits  per  Bill.     (Arts.  50  and  51.) 

157.  The  SALES  BOOK  contains  a  description  of  Bills 
of  Merchandise  sold.     It  is  kept  like  the  Day  Book.     When 
large  Bills  of  Merchandise  are  sold,  the  use  of  the  Sales 
Book  enables  us  greatly  to  abridge  the  entry  that    would 
otherwise  be  necessary  in  the  Day  Book. 

QUEST.  155.  What  part  of  the  letter  or  envelope  should  the  superscription  occupy? 
— 158.  What  is  the  Invoice  Book  ?  Does  this  require  much  labor  ?  Why  is  it  of 
little  use?  What  should  be  done  with  Invoices  ?  When  found  correct,  where  should 
they  be  entered  ?  — 157.  What  is  the  Sales  Book  ?  How  is  it  useful  ? 

124 


*$ 


COMMERCIAL    PAPERS. 


BOOKS  OF  ACCOUNT. 

158.  Persons  are  sometimes  allowed  to  introduce  their 
books  of  account  as  evidence  in  their  favor ;  but  such  testi- 
mony is  always  liable  to  the  strictest  scrutiny.     A  person 
who  would  introduce  his  own  books  as  testimony  in  his  favor 
in  court,  must  be  able  to  prove,  by  those  who  have  dealt  with 
him  and  settled  their  accounts,  that  he  keeps  his  books  cor- 
rectly and  honestly.     He  must  also  be  able  to  prove  that  the 
books  produced  are  his  account  books,  and  that  some  of  the 
articles  charged  have  been  delivered. 

NOTES,  ORDERS,  AND  RECEIPTS. 

159.  A  NOTE  is  a  written  or  printed  paper  acknowledging 
a  debt  and  promising  payment.     Notes  are  of  different  kinds. 

160.  A  PROMISSORY  NOTE  is  a  writing  which  contains 
a  promise  to  pay  money  or  deliver  property  to  another,  at  or 
before  a  time  specified,  in  consideration  of  value  received  by 
the  promisor,  or  person  who  signs  the  note.      (The  terms 
maker  of  a  note,  and  payee  of  a  note,  are  defined  in  Art.  62, 
which  see.) 

161.  A  NEGOTIABLE  NOTE  is  one  that  may  be  trans- 
ferred from  one  person  to  another,  or  that  may  be  bought 
and  sold,  and  thus  have  different  owners  at  different  times. 
Notes  are  usually  made  payable  to  the  payee  or  his  order; 
to  the  payee  or  bearer;  or  simply  to  the  bearer.     All  such 
notes  are  negotiable;  but  when  a  note  that  has  been  given  to 
the  payee  or  his  order  is  transferred,  the  payee  must  indorse 
it  by  writing  his  own  name  upon  the  back  of  it.     The  collec- 


QUEST.  158.  Are  Books  of  Account  ever  received  as  evidence?  To  what  is  such 
testimony  liable  ?  What  must  a  person  who  would  introduce  his  books  as  testimony 
be  able  to  prove?  — 159.  What  is  a  Note?— 160.  What  is  a  Promissory  Note ? 
Who  is  the  maker,  and  who  the  payee  of  a  note  ?  — 161.  What  is  a  negotiable  note? 
To  whom  are  notes  usually  made  payable  ?  Are  such  notes  negotiable?  When  muif; 
a  note  be  indorsed  ? 

11*  125 


GENERAL    BOOK-KEEPING. 


tion  of  a  note  that  is  made  payable  to  a  specified  person, 
without  any  mention  of  his  order  or  the  bearer,  can  be  en- 
forced by  the  payee  only,  or  by  his  legal  representatires. 
Such  notes  are  therefore  not  negotiable. 

162.  A  DUE  BILL  is  a  written  promise  to  pay  a  certain 
sum  of  money,  or  a  specified  amount  in  goods  or  property,  to 
a  person  named,  to  his  order,  or  to  the  bearer.     Due  Bills 
are  ^otes,  though  less  formal  than  promissory  notes  usually 
are.     \fhether  negotiable  or  not,  depends  upon  the  circum- 
stances just  enumerated.     (Art.  161.) 

163.  A  BANK  NOTE  is  a  promissory  note,  issued  by  a 
banking  company,  signed  by  the  president  and  countersigned 
by  the  cashier,  and  payable  to  the  bearer  in  gold  or  silver  at 
the  bank,  on  demand.     Bank  Notes  are  of  course  negotiable, 
being  made  payable  to  the  bearer;    and   they  are    usually 
secured  by  a  deposit  of  state  stocks.     (Art.  255.) 

164.  An  ORDER  is  a  written  request  to  deliver  money, 
goods,  or  other  property,  to  some  person  specified,  to  his 
order,  or  to  the  bearer.     The  person  on  whom  an  order  may 
be  given  is  under  no  legal  obligations  to  pay  it,  unless  he 
first  engages  to  do  so.     Orders  are  generally  considered  pay- 
able on  presentation.     They  are  sometimes  accepted  by  the 
person  on  whom  they  are  drawn.     This  may  be  done  by  his 
simply  writing  the  word  "Ac^pted"  either  across  the  back 
or  face  of  the  order,  (but  usually  the  latter,  and  in  red  ink^) 
and  signing  his  name  to  it.  Before  this  is  done,  an  order  may 
be  regarded  as  evidence  of  debt  against  the  drawer  of  it ;  but 
afterward,  it  may  be  considered  as  evidence  of  debt  against 
the  acceptor,  who,  in  accepting,  agrees  to  pay. 


QUEST.  161.  What  notes  can  be  collected  by  the  payee  only,  or  by  his  legal  repre- 
sentatives ?  Are  such  notes  negotiable  ?  — 162.  What  is  a  Due  Bill  ?  Are  due  bills 
notes  ?  —  Are  they  negotiable,  f  —  163.  What  is  a  Bank  Note  ?  Are  bank  notes  nego- 
tiable?— 164.  What  is  an  Order  ?  Is  the  person  on  whom  an  order  may  be  dniwn 
tinder  obligations  to  pay  it  ?  When  are  orders  generally  considered  payable  ?  How 
may  an  order  be  accepted  by  the  person  upon  whom  il  is  drawn  ?  Against  whom  may 
an  oi-der  be  considered  as  evidence  of  debt  ? 

126 


COMMERCIAL    PAPERS. 


165.  A  RECEIPT  is  a  written  'statement,  signed  by  the 
giver  of  it,  acknowledging  that  he  has  received  a  specified 
amount  of  money,  goods,  or  other  property.     A  receipt  of 
money  may  be  in  part  or  in  full  payment  of  a  debt,  and  it 
operates  as  a  discharge  of  the  debt  either  in  part  or  in  full,  as 
the  case  may  be.     A  receipt  of  goods  makes  the  receiver  liable 
to  account  for  the  same,  according  to  the  nature  of  the  transac- 
tion, or  the  tenor  of  the  writing.     Orders  and  receipts,  like 
bills  of  goods,  should  be  preserved  and  placed  on  file. 

CHECKS,  DRAFTS,  AND  BILLS  OF  EXCHANGE. 

166.  BANKS  are   institutions  for   the   deposit  and  safe 
keeping  of  money.     (Art.  230.)     When  merchants  and  others 
deposit  money  in  a  bank,  and  keep  a  bank  account,  each 
depositor  is  usually  furnished  by  the  bank  with  a  small  Bank 
Book,  on  the  Cr.  side  of  which  are  entered  his  deposits,  and 
on  the  Dr.  side  the  sums  he  withdraws.      A  depositor  has 
credit  at  a  bank  only  while  the    Cr.   side   of  his   account 
exceeds  the  Dr.  side,  unless  by  special  agreement. 

167.  A  CHECK  is  an  order  addressed  to  a  bank  for  the 
payment  of  money  to  the  bearer,  to  a  person  named  in  the 
check,  or  to  his  order.     While  a  depositor  has  money  to  his 
credit  at  a  bank,  his  checks  are  paid  on  presentation.     But 
when  one's  bank  account  is  drawn  up,  his  checks  are  no  longer 
paid,  unless  by  a  special  arrangement.     Checks  should  there- 
fore be  presented  for  payment  or  acceptance  as  soon  after 
they  are  given  as  practicable. 

168*  A  DRAFT  is  an  order  addressed  by  one  bank  or 
mercantile  house  to  another,  for  the  payment  of  money  to  a 
person  named,  or  to  his  order.  When  a  draft  is  payable  at 

QUEST.  165.  What  is  a  Receipt?  How  does  a  receipt  of  money  operate?  How  a 
receipt  of  goods?  What  should  be  done  with  orders  and  receipts  ?  —  166.  What  are 
Banks  ?  What  is  a  Bank  Book  ?  When  has  a  depositor  credit  at  a  bank  ?  — 167. 
What  is  a  Check  ?  When  will  a  depositor's  checks  on  a  bank  be  paid  ?  When  sh  ouid 
checks  be  presented  for  payment  ?  — 168.  What  is  a  Draft  ? 

127 


GENERAL    BOOK-KEEPING. 


sight,  or  thirty  or  sixty  days  after  sight,  three  additional  days, 
known  as  "days  of  grace,"  are  by  common  usage  allowed  for 
payment.  Drafts  are  therefore  sometimes  drawn  payable  at 
sight,  "without  grace."  (Form  No.  9.) 

169.  A  BILL  OF  EXCHANGE  is  a  written  request  or 
order  addressed  by  one  bank  or  commercial  house  to  another, 
requesting  the  payment  of  money  to  a  third  person  named,  or 
to  his  order.     Bills  of  Exchange  are  Domestic  and  Foreign. 
When  Bills  of  Exchange  are  drawn  by  parties  residing  in 
one  state  or  country  upon  persons  in  the  same  state  or  country, 
they  are  called  Bills  of  Domestic  Exchange.     When  the 
parties  to  bills  reside  in  different  states  or  countries,  and  bills 
which  are  drawn  in  one  country  are  made  payable  in  another, 
they  are  called  Bills  of  Foreign  Exchange. 

170.  The  person  who  makes  or  draws  and  signs  a  Bill 
of  Exchange  is  called  the  maker  or  drawer;  the  person  to 
whom  it  is  addressed,  the  drawee,  and  the  person  to  whom 
or  to  whose  order  it  is  payable  is  called  the  payee.     When 
the  drawee  accepts  a  bill  he  becomes  the  acceptor -,  and  thereby 
assumes  the  obligation  for  its  payment  according  to  its  tenor. 
(Art.  164,  and  Form  No.  10.) 

171.  A  SET  OF  EXCHANGE  usually  embraces  three  bills 
of  the  same  date  and  tenor.     When  any  one  of  the  set  is 
paid  the  others  are  void.     The  object  of  a  Set  of  Exchange 
is  simply  to  provide  beforehand  against  inconvenience  in  case 
one  of  the  set  should  be  lost  in  transmission.     The  holder  of 
a  Set  of  Exchange  may  send  two  of  the  set  forward  for  pay- 
ment, by  different  conveyances,  and  retain  the  third  himself. 
Then  in  case  one  is  miscarried  the  other  may  reach  its  desti- 
nation and  be  paid.     If  both  are  lost  the  third  may  be  used. 

QUEST.  168.  What  are  "  days  of  grace  "  ?  How  are  drafts  sometimes  made  pay- 
able ?  — 169.  What  is  a  Bill  of  Exchange  ?  What  is  said  of  domestic  exchange,  -and 
what  of  foreign  ?  — 170.  Who  is  the  maker  or  drawer  of  a  bill  ?  Who  is  the  drawee,  $ 
Who  the  payee?  Who  the  acceptor?  What  obligation  does  the  acceptor  of  a  bill 
assume?  — 171.  What  is  a  Set  of  Exchange?  When  one  of  a  set  is  paid,  what  of 
the  others  ?  What  is  the  object  of  a  set  ? 

123 


COMMERCIAL    FORMS. 


No.  1.  —  A  Promissory  Note. 


$45.50. 

&ra?nuG£ 

otfo^tv&    ana    y<jflr 


zt-u    daw    a/tet    date,    (2^    fiwmM-e  to 

ff  ff  V  I 

>,    at    my. 


No.  2.  —  A  common  Note  of  Hand. 


.00.  sra«invn>a£G/n,, 

& 

ofioi    vaute    tecetvea,     (=x    fotowiMe    to 

I 


next. 


M 


No.  3.  —  A  Note  for  Property. 


$  60.00.  'Jjr&fy^otct,  Q^ay  fOt£,  <f$60. 

d?w>ti*  daw  a/tez  date,    of  fitomMe  to  de/tvet  to 

v  y  v  '  ( 

<&<^y 


No  4.  —  A  Due  Bill  for  Goods. 


tu  ttcom,  <?«   0id'&t.,  Q^owite&n,  and 

tom  mw   G&fote,  va&te  tecewea'. 

ff 

p  />       '~t&° 
fofvn,  Q/t/. 


GENERAL    BOOK-KEEPING. 


No.  5.  —  An  Order  for  Money  and  Goods. 


"JSZ6 


Q2)o(tai<!)  tn  ^^ood<i  yfiom   yowl,  (zffioze,    and 
.00. 


No.  6.  —  A.  Receipt  for  Property. 


te,  a  good  one=no 
& 


No.  7.  —  A  Receipt  in  full  of  all  Demandt. 


f  $47.47.  G^ew   <^ot&,   fafy  40t&,  4 $60. 

£%ecetved    worn    ^a/me<)     Qwttcrieet,     4ie%  ^fOv 

'M4on,  •  Q/ivo 


8.  —  A  Check,  payable  to  Bearer. 


.  425.  &&&<>*,  G^K£.,  <&e/a.  40t£,  4  $60. 

of     IW 


o* 

=&t,ve  and  ^^j   Q&oiiazd,  a 
account 


130 


COMMERCIAL 


No.  9-  —  A  Draft,  payable  to  Order. 

237.  Ers.e\iaixge  Bank  o£  Album 


a^ace,    Jiau  to  t 
a  •     ff 

Q/tew  {TCittftckect  a/no* 


,  anct  c&ztae  t&e  tame  to 

/1/LcLLLh.eLLL  &. 


No.  10.  —  A  BiU  of  Exchange. 


Hells,  Jfargo  #  Ci 

Exchange  for  $27 §.00. 


EXPBESS 

BANKINC 
OFFICE. 


J.  H.   LAPHAMj   ESQ.,    at 


to  account 

Wells,  Fargo  fy  Go., 
Broadway,  JVeiv  York. 


No.  10  is  a  Bill  of  Exchange  drawn  by  one  branch  of  a 
Banking  House  upon  another,  the  same  house  having  several 
branches.  It  is  drawn  in  San  Francisco,  and  when  indorsed 
by  J.  H.  Lapham  will  be  paid  on  presentation  at  the  office  in 
Boston,  and  charged  to  the  central  office  in  New  York.  The 
other  two  of  the  set  are  like  this,  with  but  one  exception  : 
the  words  Second  and  Third  alternately  take  the  place  of 
First,  which  passes  within  the  parenthesis, 

QDEST.  171.   What  is  said  of  Form  No.  10  ?    Where  is  it  drawn,  and  where  pay- 
able 2    How  do  the  other  bills  of  the  Set  of  Exchange  differ  from  the  first  f 

131 


PAET    SECOND. 

COMMERCIAL  CALCULATIONS. 


PERCENTAGE. 

172.  PERCENTAGE  is  an  allowance  made  by  the  hundred. 
The  number  denoting  the  allowance  is  called  the  rate  per 
cent.     Thus :  5  per  cent,  of  any  number  means  5  for  every 
hundred  of  the  number,  or  5  hundredths  of  the  number,  and 
is  written  decimally  .05,  or  5  °/Q  ;  and  so  of  other  rates  per  cent. 

Example  1.     What  is  the  percentage  of  $2565  at  6  per 
cent.?  Ans.  $153.90. 

OPERATION.  Explanation.     In   multiplying  the   given 

$2565.  number  by  .06,  and  pointing  off  as  required 

•06  in  decimals,  it  is  evident  we  obtain  6  hun- 

$153.90  Ans.      dredths  of  the  number,  or  6  per  cent,  of  it; 
and  so  of  every  other  number.     Hence, 

173.  To  obtain  a  given  percentage  of  any  number. 
tiply  the  given  number  by  the  rate  per  cent,  expressed  decir 
and  the  product  witt  be  the  percentage. 

Ex.  2.     What  is  8  per  cent,  of  $450275  ?     Ans.  $36022. 
Ex.  3.     What  is  4  per  cent,  of  7850  sheep  ? 

Ans.  314  sheep. 
Ex.  4.     What  is  17  per  cent,  of  493  years  ? 

Ans.  83.81  years. 
Ex.  5.     What  is  If  per  cent,  of  $8792.80  ? 

Ans.  $153.874. 

174.  Percentage  is  applied  in  various  practical  concerns 
in   life,   among  which    are    Interest,    Discount,    Exchange, 
Taxes,  Commission,  and  Insurance. 

QUEST.  172.   What  is  Percentage  ?    What  is  the  rate  per  cent.?  — 173.  How  da 
you  obtain  a  given  percentage  of  any  number  ?  — 174.  To  what  is  percentage  applied  I 


INTEREST. 


INTEREST. 

175.  INTEREST  is  a  sum  agreed  upon  to  be  paid  by  the 
borrower  to  the  lender,  for  the  use  of  money.  It  is  generally 
reckoned  at  a  certain  per  cent,  by  the  year;  but  sometimes 
at  a  given  per  cent,  by  the  month. 

The  PRINCIPAL  is  the  money  lent  on  which  interest  is  paid. 
The  AMOUNT  is  the  Principal  and  Interest  together. 
Example  1.     What  is  the  interest  of  $480  for  2  years,  10 
months,  and  18  days,  at  7  per  cent.?     What  is  the  amount? 
Explanation.     The  rate  per  cent, 
being  7,  it  is  evident  we  obtain  the 
interest  for  1  year  by  multiplying  by 
.07 ;  and  for  2  years  by  multiplying 
the  interest  for  1  year  by  2,  the  num- 
ber of  years.     The  interest  for  1  year 
divided  by  2  will  give  the  interest  for 
6  months ;  and  this  divided  by  2  will 
give  the  interest  for  3  months,  which, 
divided  by  3,  will  give  the  interest  for 
1  month.     This  last  divided  by  2  will 
give  the  interest  for  15  days,  which, 
divided  by  5,  will  give  the  interest 
for  3  days.    These  several  sums  taken 


OPERATION. 

$480.  Principal. 
.07  Rate. 

2)33.60  Int.  1  year. 
2  No.  of  years. 

67.20  Int.  2  years. 
2)16.80  Int.  6  mos. 
3)  8.40  Int.  3  mos. 
2)  2.80  Int.  1  mo. 
5)   1.40  Int.  15  days. 
.28  Int.  3  days. 

96.88  Interest. 
480.      Principal. 


$576.88  Amount. 

together  will  give  the  interest  of  $480  for  2  years,  10  months, 
and  18  days.  The  same  principle,  it  is  manifest,  will  apply 
to  any  other  sum  of  money,  at  any  rate  per  cent.,  and  for  any 
length  of  time  for  which  we  may  desire  to  know  the 
interest.  Hence, 

176.  To  find  the  interest  on  any  given  principal,  at  any 
rate  per  cent.,  and  for  any  length  of  time,  we  have  the  gen- 
eral rule  given  on  the  following  page. 

QCEST.  175.  What  is  Interest ?  How  is  interest  reckoned ?  What  is  the  principal" 
What  the  amount?  — 176.  How  do  you  find  the  interest  at  any  rate  per  cent,  and 
for  any  length  of  time  t 

12  133 


GENERAL    BOOK-KEEPING. 


GENERAL  RULE  FOR  INTEREST. 

I.  For  Years.     Multiply  the  principal  by  the  given  rate 
expressed  decimally,  and  the  product  will  be  the  interest  for  one 
year.      Then  multiply  the  interest  for  one  year  by  the  number 
oj  years  for  which  interest  is  required. 

II.  For  Months.      Take  such  fractional  parts  of  one  year's 
interest  as  the  number  of  months  require. 

III.  For  Days.     Take  such  fractional  parts  of  one  month' & 
interest  as  the  number  of  days  require. 

Interest.  The  interest  for  the  given  number  of  years, 
months,  and  days,  added  together,  will  be  the  interest  required. 

Amount.  To  the  interest  thus  obtained  add  the  principal^ 
and  we  have  the  amount. 

Ex.  2.  What  is  the  interest  of  $1440  for  5  years,  9  months, 
and  6  days,  at  7  per  cent.  ?  Ans.  $581.28. 

Ex.  3.  What  is  the  amount  of  $1440  for  3  years,  7  months, 
and  5  days,  at  6  per  cent.  ?  Ans.  $1750.80. 

PARTIAL  PAYMENTS. 

177.  When  partial  payments  have  been  made  on  Notes, 
Bonds,  and 'written  obligations  generally,  the  decisions  of  the 
Supreme  Court  of  the  United  States,  and  of  the  Courts  of 
most  of  the  States,  recognize  the  following  principles :  — 

I.  Partial  payments  apply  first  in  payment  of  the  interest 
due  on  an  obligation  at  the  time  they  are  made. 

II.  When  a  payment  exceeds  the  interest  due  at  the  time, 
the  excess  of  payment  applies  in  discharge  of  the  principal. 
Interests  subsequently  accruing  are  to  be  computed  on  that  part 
of  the  principal  which  remains  unpaid,  as  a  new  principal. 

III.  When  a  payment  is  less  than  the  interest  due  at  the 
time,  the  surplus  of  interest  does  not  augment  the  principal. 

QUEST.  177.   What  principles  have  been  established  by  the  Courts  when  partial 
payments  are  made  on  Bonds  and  Notes  ? 

134 


DISCOUNT. 


Interest  in  such  cases  continues  on  the  last  principal,  until 
payments  are  made  which,  taken  together,  exceed  the  intere? 
due.  Any  excess  of  payment  at  any  time,  over  interests  due, 
applies  in  discharge  of  the  principal. 

COMPUTATION   OF  TIME. 

178.  In  computing  the  time  that  has  elapsed  between 
two  different  dates,  we  write  the  later  of  the  two  dates  first  ; 
then  place  the  earlier  date  below,  and  subtract.     We  write 
in  each  instance  the  year,  the  number  of  months  that  have 
passed  in  the  year,  and  the  day  of  the  month.* 

$1285.  NEW  YORK,  March  8th,  1857. 

Ex.  4.     For  value   received   I   promise   to   pay  Samuel 
White,  or  order,  Twelve  Hundred  and  Eighty-five  Dollars, 
on  demand,  with  interest  at  7  per  cent.      JAMES  MARSHALL. 
Partial  payments  are  made  on  this  note  as  follows  :  — 
Sept,  8,  1857,  received      .     $85.50. 
June  18,  1858,     do.  .       30.25. 

March  24,  1859,  do.  .     250.00. 

What  amount  was  due  on  taking  up  the.  note,  Feb.  9,  1860  ? 

Ans.  $1166.065. 

DISCOUNT. 

179.  DISCOUNT  is  an  allowance  made  for  the  payment 
of  a  sum  of  money  before  it  is  due.     If  I  give  my  note  to  a 
man  for  $107,  payable  in  one  year,  without  interest,  the  pres- 
ent worth  of  the  note  is  $100  ;  for  this  sum  placed  at  interest 
for  one  year  at  7  per  cent,  will  amount  to  $107  at  the  time 
the  note  becomes  due.     In  this  case  the  present  worth  is 


*  Interest  is  sometimes  computed  for  a  period  including  both  the  day  OL:  which  a 
note  is  dated,  and  the  day  on  which  payment  is  made;  or  to  the  following  day.  But 
time  is  not  thus  reckoned  in  this  work. 

QUEST.  178.  How  do  you  compute  the  time  between  two  dates?  —  179.  What  is 
Discount  ?  What  is  the  present  worth  of  a  note  for  $107,  payable  in  a  year,  without 
Interest,  money  being  worth  7  per  cent.  ? 


GENERAL    BOOK-KEEPING. 


9r  1  /or  °f  tne  y^6  °f  the  note,  or  the  amount  named  in  it 
But  $1.07  is  the  amount  of  $1.  for  the  time  before  the  note 
becomes  due,  with  interest  at  the  given  rate.  Now,  the  pres- 
ent worth  of  any  note  not  drawing  interest  will  sustain  a  cor- 
responding relation  to  its  face,  whatever  may  be  the  rate  per 
cent,  at  which  interest  is  computed,  or  the  time  before  the 
note  becomes  due.  Therefore, 

180.  To  find  the  present  worth  of  any  sum  of  money 
payable  at  a  future  time  without  interest, 

Divide  the  given  sum  by  the  amount  of  $1  at  the  given  rate 
and  for  the  given  time,  and  the  quotient  will  be  the  present 
worth  required. 

181.  The  present  worth  of  a  note  subtracted  from  its 
face  will  give  the  true  discount. 


BANK  DISCOUNT. 

182.  BANK  DISCOUNT  is  the  sum  charged  by  Banks  for 
discounting  notes  and  drafts,  and  is  the  same  as  interest  paid 
in  advance,  with  this  difference :   three  days  are  added  to  the 
time   in   computing   Bank    Discount.     But   these   days  are 
allowed  in  the  payment  of  notes,  and  are  known  as  days  of 
grace.     Therefore, 

183.  To  find  the  Bank  Discount  on  any  Note  or  Draft 
payable  at  a  future  time,  without  interest, 

Compute  the  interest  on  the  note  or  draft  for  three  days 
more  than  the  time  specified,  and  the  result  will  be  the  discount 
required. 

184.  The  discount  of  a  bank  note  subtracted  from  its/«c<? 
gives  the  present  worth  of  the  note,  or  its  proceeds. 


QUEST.  180.  How  do  you  find  the  present  worth  of  a  sum  due  at  a  future  time  ? 
—  181.  How  do  you  find  the  true  discount  t  — 182.  What  is  Bank  Discount?  What 
are  days  of  grace  f  — 183.  How  do  you  find  the  Bank  Discount  on  a  note  or  draft 
due  at  a  future  time  without  interest  ?  — 184.  How  do  you  find  the  proceeds  of  such 
a  note  ? 


EXAMPLES    FOR   PRACTICE. 


185.  To  find  the  present  worth  by  Bank  Discount  of  a 
note  due  at  a  future  time,  and  drawing  interest  at  a  given 
rate  per  cent., 

Compute  the  interest  on  the  note  to  the  time  it  becomes  due. 
The  Bank  Discount  subtracted  from  the  amount  of  the  note 
when  due,  will  give  its  present  worth. 

In  case  I  present  an  approved  note  of  $100  at  the  Bank, 
payable  in  one  year,  without  interest,  and  ask  to  have  the 
same  discounted,  interest  being  at  7  per  cent,  for  a  year,  the 
officers  of  the  Bank  will  give  me  $100,  less  the  interest  of 
$100,  or  $93.  (Art.  182.)  The  face  of  the  note  is  therefore 
-W~>  or  .FU  of  the  amount  of  its  proceeds,  or.  of  its  present  worth. 
But  $.93  is  the  present  worth  of  $1.00,  by  Bank  Discount,  for 
the  time  before  the  note  becomes  due,  interest  being  com- 
puted at  the  given  rate.  Now  the  proceeds  of  any  Bank 
Note,  due  at  a  future  time,  and  not  drawing  interest,  will 
sustain  a  corresponding  relation  to  its  face,  whatever  may  be 
the  rate  per  cent,  at  which  interest  is  computed,  or  the  time 
before  the  note  becomes  due.  Therefore, 

186.  To  find  the  face  of  a  Bank  Note  payable  in  a  speci- 
fied time,  without  interest,  whose  immediate  proceeds  shall, 
on  discounting  the  note,  amount  to  a  given  sum, 

Divide  the  required  proceeds  by  the  present  worth  of  $1  at 
the  given  rate  and  for  the  given  time,  and  the  quotient  will  be 
the  face  of  the  Bank  Note  required. 

EXAMPLES  FOR  PRACTICE. 

Example  1.  What  is  the  true  discount  on  $407.00  for 
three  months  at  7  per  cent.?  (Arts.  180  and  181.) 

Ans.  $7.00. 

Ex.  2.  What  is  the  Bank  Discount  on  $407.00  for  three 
months  at  7  per  cent.  ?  (Arts.  182  and  183.)  Ans.  $7.36. 

QUEST.  189f  How  do  you  find  the  present  worth,  by  Bank  Discount,  of  a  note  due 
at  &  future   time  and  drawing  interest  at  a  given  rate  ?     How  do  you  find  the 
face  of  a  Bank  Note  payable  in  a  given  time,  without  interest,  whose  immediate  pro- 
ceeds shall,  on  discounting  the  note,  amount  to  a  given  sum? 
12  *  137 


f 
I 

GENERAL    BOOK-KEEPING. 


Ex.  3.  What  is  the  Bank  Discount  on  $800.00  for  thirty- 
days  at  7  per  cent.  ?  Am.  $5.13. 

Ex.  4.  What  is  the  true  discount  on  $800.00  for  thirty 
days  at  7  per  cent.  ?  Ans.  $4.64. 

Ex.  5.  A  man  has  a  good  note  for  $800.00,  payable  at 
the  Exchange  Bank  the  2d  day  of  September,  1860.  It  is 
dated  July  2d,  1860,  and  draws  interest  at  6  per  cent,  from 
date.  He  procures  it  discounted  at  the  Bank  the  2d  day  of 
August,  at  usual  rates  with  the  Bank,  legal  interest  being  at 
6  per  cent.  How  much  money  does  he  receive  as  the  pro- 
ceeds of  his  note  ?  Ans.  $803.556. 

Ex.  6.  "  A  person  wishes  to  use  $1000.00,  and  can  procure 
money  for  thirty  days  at  the  Bank  on  his  indorsed  note  at  the 
rate  of  7  per  cent,  per  annum.  For  what  amount  must  his 
note  be  drawn  that  he  may  realize  $1000.00  net  proceeds 
for  present  use  ?  (Arts.  185  and  186.)  Ans.  $1006.46. 

Ex.  7.  A  person  owes  a  debt  of  $1500.00,  toward  the 
payment  of  which  he  is  able  to  raise  but  $900.00.  He  offers 
this  sum  to  be  applied  in  part  toward  paying  the  debt,  but 
desires  to  retain  enough  to  pay  in  advance  the  interest  due 
on  the  balance  of  the  debt,  at  8  per  cent,  per  annum,  for  9 
months,  without  grace,  and  secures  the  same  by  his  indorsed 
note.  What  is  the  face  of  the  note  ?  Ans.  $638.30. 

Ex.  8.  A  man  bought  a  farm  for  S42 68.00,  payable  in 
cash ;  but  as  his  means  are  not  at  present  available,  he  obtains 
the  money  for  four  months  at  a  bank.  How  large  a  note  is 
required  to  raise  the  money  at  a  discount  of  6  per  cent,  per 
annum?  Ans.  $4357.325. 

EXCHANGE. 

187.  EXCHANGE,  in  commerce,  implies  a  mode  of  paying 
debts,  when  debtor  and  creditor  reside  in  different  places, 
without  the  actual  transmission  of  money,  the  indebtedness 
of  the  two  places  to  each  other  being  mutually  exchanged. 

QOEST.  187.   What  does  Exchange  imply  ? 
138 


EXCHANGE. 


This  is  done  by  means  of  Drafts,  or  Bills  of  Exchange,  which 
are  usually  drawn  by  one  bank  upon  another.  (Arts.  168  to 
171,  and  234  to  242.) 

188.  Two  Banks  in  different  cities,  having  confidence 
in  each  other,  for  mutual  advantage  and  the  convenience  of 
their  customers  agree  to  pay  one  another's  drafts  to  a  given 
amount.     Each  bank  renders  a  monthly,  weekly,  or  daily 
statement  of  account  to  the  other ;   and,  on  settlement,  the 
bank  whose  drafts  upon  the  other  amount  to  the  greater  sum 
pays  the  balance  due  in  money.     This  arrangement  enables 
the  Banks  of  two  cities  to  sell  Drafts,  or  Bills  of  Exchange, 
upon  each  other  for  a  less  sum  than  it  would  cost  their  cus- 
tomers to  send  the  money  from  one  city  to  the  other,  and  at  the 
same  time  to  receive  enough  to  pay  them  for  their  trouble. 

189.  The  rate  of  Exchange  between  two  places  depends 
upon  the   character  and  relative  supply  of  the  circulating 
medium  in  the  two  places,  and  upon  the  relative  indebtedness 
of  the  two  places  \o  each  other.     The  rate  is  higher  when  the 
currency  of  a  place  is  insufficient  in  quantity,  or  poor  in 
quality,  and  when  its  relative  indebtedness  is  great.     The 
rate  is  lower  when  the  currency  of  a  place  is  abundant  in 
quantity,  or  good  in  quality,  and  when  its  relative  indebted- 
ness ig  small. 

190.  The  cost  of  Exchange  to  the  buyer  is    generally 
estimated  at  a  certain  rate  per  cent.,  and  is  computed  like 
interest  or  percentage.     Exchange,  though  sometimes  at  a 
discount,  generally  sells  at  a  premium.     Its  market  value 
depends,  like  that  of  other  products,  upon  the  relation  of 
supply  and  demand.     When  there  is  a  large  supply  and  little 
demand,  Exchange  is  abundant,  and  consequently  low;  and 


QUEST.  187.  How  is  this  done  ?  — 188.  What  arrangements  do  Banks  make  with 
each  other  ?  What  does  this  arrangement  enable  the  Banks  to  do  ?  — 189.  What  does 
the  rate  of  Exchange  depend  upon  ?  When  is  the  rate  higlier,  and  wh?n  lower  t  — 
190.  How  is  the  cost  of  Exchange  generally  estimated  ?  Does  Exchange  always  sell 
at  a  premium  ?  What  does  its  market  value  depend  upon  ? 

139 


GENERAL    BOOK-KEEPING. 


sometimes  even  at  a  discount.  But  when  the  supply  is  small 
and  the  demand  great,  Exchange  is  scarce,  and  consequently 
high. 

EXAMPLES   FOR   PRACTICE. 

Example  1.  What  is  the  cost  in  Chicago  of  $1260.00  in 
Exchange  on  New  York,  Exchange  being  at  a  premium  of 
?  Ans.  $1291.50. 

Ex.  2.  What  is  the  cost  in  Detroit  of  $1260.00  in  Ex- 
change on  New  York,  Exchange  being  at  a  premium  of 
J  of  l°/0  ?  Ans.  $1269.45. 

Ex.  3.  What  is  the  cost  in  New  Orleans  of  $1260.00  in 
Exchange  on  St.  Louis,  Exchange  being  at  a  discount  of 
j.  of  \°/0  ?  Ans.  $1256.85. 

Ex.  4.  What  is  the  cost  in  New  York  of  $1260.00  in 
Exchange  on  Boston,  Exchange  being  at  a  premium  of 
i  of  1%  ?  Ans.  $1262.52. 

Ex.  5.  What  is  the  cost  in  Cincinnati  of  $1260.00  in 
Exchange  on  Philadelphia,  Exchange  being  at  a  premium 
of  -f  of  \°/Q  ?  Ans.  $1267.56. 

Ex.  6.  I  sell  in  Detroit  $1260.00  in  Exchange  on  St, 
Louis,  at  a  discount  of  2^^,  and  buy  with  the  proceeds 
Exchange  on  Boston  at  a  premium  of  £  of  1%.  What 
amount  in  Ex.  on  Boston  do  I  obtain  ?  Ans.  $1222.41. 

COMMISSION,   INSURANCE,   AND   DUTIES. 

191.  COMMISSION  is  an  allowance  made  by  a  principal 
to  an  agent  for  buying  or  selling  goods,  and  is  generally 
reckoned  at  a  certain  rate  per  cent. 

INSURANCE  is  security  against  loss  of  property  by  fire, 
storms,  and  other  casualties,  and  is  known  as  Fire  Insurance, 
Marine  Insurance,  or  Life  Insurance,  according  to  the  nature 
of  the  indemnity  given. 

QUEST.  190.  What  is  the  effect  of  a  large,  and  what  of  a  small  supply  ?  — 191. 
What  is  Commission  ?  How  is  commission  generally  reckoned  ?  What  is  Insurance  J 
Under  what  names  ia  insurance  known  ? 

140 


EQUATION    OF   PAYMENTS. 


DUTIES,  in  commerce,  imply  a  sum  of  money  which  Gov- 
ernment requires  to  be  paid  on  certain  imported  goods. 

192.  The  principles  of  Percentage,  as  already  explained 
and  employed  in  treating  upon  Interest,  Discount,  and  E$ 
change,  are  equally  applicable  to  Commission  and  Insurance, 
and  to  Duties,  (except  when  specific,)  and  need  not  be  further 
elucidated. 

EXAMPLES  FOR  PRACTICE. 

Example  1.  I  pay  an  attorney  2£%  for  collecting 
$760.00.  What  is  his  commission  ?  Ans.  $17.10. 

Ex.  2.  A  merchant  pays  1£%  per  annum  for  insurance 
on  a  stock  of  goods  worth  $12,500.00.  What  will  he  pay  for 
insurance  in  2  years  ?  AnSj,  $312.50. 

Ex.  3.     What  are  the  duties  on  an  invoice  of  silks  pur- 
chased in  Italy  at  a  cost  of  $4220.00,  the  duty  being 
of  the  invoice  ?  Ans.  $1434.80. 

EQUATION  OF  PAYMENTS. 

193.  EQUATION  OF  PAYMENTS  is  the  method  of  finding 
the  average  time  of  payment  of  a  whole  debt,  where  several 
sums  are  due  at  different  times,  so  that  neither  party  shall 
sustain  loss. 

194.  To  find  the  average  time  of  payment  of  a  whole 
debt,  where  several  sums  are  due  at  different  times, 

Multiply  each  sum  by  the  time  before  it  becomes  due. 
Divide  the  sum  of  the  products  thus  obtained  by  the  whole 
debt,  and  the  quotient  will  be  the  average  time  of  payment. 

195.  This  rule  is  based  upon  the  supposition  that  the 
gain  to  a  creditor  from  the  payment  of  a  sum  of  money  before 
it  becomes  due,  is  equal  to  the  loss  to  him  from  delay  of  pay- 
ment of  a  like  sum  for  the  same  length  of  time  after  it  is  due ; 

QCJEST.  191.  What  are  Duties?  — 192.  What  application  is  made  of  the  principles 
of  Percentage?  — 193.  What  is  Equation  of  Payments ?  — 194.  How  do  you  find 
the  average  time  of  payment  of  a  whole  debt,  when  several  payments  are  due  at 
iifferent  times  ?  — 195.  Upon  what  principle  is  this  rule  based  ? 

141 


GENERAL    BOOK-KEEPING. 


whereas  the  gain  is  to  the  loss  as  the  discount  of  a  given  sum 
is  to  the  interest  of  a  like  sum  for  {Jie  same  time. 

ILLUSTRATIVE  EXAMPLES. 

Example  1.  H.  Ellis  owes  me  $140,  of  which  $80  falls 
due  in  1  month ;  $40  in  3  months ;  and  $20  in  4  months. 
He  desires  to  pay  the  whole  amount  at  once.  In  what  time 
shall  payment  be  made  so  that  neither  party  shall  sustain 

Ans.  2  months. 
The  interest  of  $80  for 
1  month  is  equal  to  that  of  $1  for  80 
months.  The  interest  of  $40  for  3  mos. 
is  equal  to  that  of  $1  for  120  mos.  And 
the  interest  of  $20  for  4  mos.  is  equal  to 
that  of  $1  for  80  mos.  The  whole  inter- 
est is  hence  equal  to  the  interest  of  $1  for  280  mos.,  (the  sum 
of  the  products,)  which  will  evidently  equal  as  many  months' 
interest  of  $140  as  140  is  contained  times  in  280,  or  2  mos., 
which  is  the  time  required. 

Ex.  2.  Sold  Merchandise  to  D.  Martin  at  times  and  in 
amounts  as  stated  below.  What  is  the  average  date  of  all  the 


loss? 

OPERATION. 

Am't.      Mos.     Product. 

80  X  1  =    80 

40  X  3z=120 

_20  X  4=    80 

140  280 


Bills  ? 

Dates  and  Amis,  of  Bills. 
No.  1,  May  1,  Bill  of  $60. 

"    2,     "      8,     "     «      60. 

<•    3,    «    16,     "     "      60. 


4, 


25, 


70. 


Ans.  May  13th. 

OPERATION. 
Am't.         Days.  Product. 

60  X    0  =       00 

60  X    7  =     420 

60  X  15  =     900 

70  X  24  =  1680 


3000  -^  250  =  12  days.  250  3000 

Explanation.  We  reckon  the  time  from  the  date  of  the 
first  Bill,  May  1st.  The  Bills,  then,  have  severally  to  run  as 
follows :  No.  1,  0  days ;  No.  2,  7  days ;  No.  3,  15  days ;  and 

QUEST.  195.  State  and  explain  the  first  example  in  Equation  of  Payments.    St»t« 
»nd  explain  the  second  example. 

142. 


EQUATION    OF    PAYMENTS. 


No.  4,  24  days.  The  calculation  gives  an  average  of  12  days. 
As  we  reckon  from  May  1st,  12  days  added  will  give  the 
average  date  of  the  whole,  which  is  May  13th.  Hence, 

196.  To  find  the  average  date  of  several  bills  of  various 
amounts  and  bearing  different  dates, 

Reckon  the  time  between  the  earliest  date  of  a  bill  and  the 
date  of  each  of  the  several  bills,  and  determine  the  AVERAGE 
TIME  of  the  whole,  as  in  Art.  194.  This,  added  to  the  date 
from  which  we  reckon,  will  give  the  AVERAGE  DATE  required. 

Had  the  bills  in  the  second  example  been  sold  on  a  credit 
of  4  or  6  months,  the  average  time  of  payment  for  the  whole 
would  be  the«same  time  after  the  average  date  of  May  13th, 
as  determined  above. 

In  case  bills  are  sold  at  various  times  and  on  different 
credits,  ascertain  when  they  severally  fall  due,  and  then  de- 
termine the  average  time  of  payment,  as  in  Art.  194. 

Ex.  3.  I  have  an  Exchange  Mdse.  Acct.  with  Henry 
Brown.  His  Debits  amount  to  $800,  and  their  average  date 
is  June  26th.  His  Credits  amount  to  $550,  and  their  average 
date  is  June  1st.  What  is  the  Balance  of  the  account,  and 
when  is  it  due  ?  Ans.  $250 ;  due  August  21st. 


&&&* 

$00 

00 

fane 
Aug. 

/ 
21 

&yG4fa*e. 
Balance    . 

550 
250 

00 
00 

$00 

&00 

00 

OPERATION. 

550  X  25  =  13,750 
13,750  ^  250  =  55 


Explanation.  Multiply  the  smaller 
side  of  the  account  ($550)  by  the 
number  of  days  that  intervene  between 


QUEST.  196.   How  do  you  find  the  average  date  of  several  bills  of  various  amountt 
and  bearing  different  dates  ?    Stata  and  explain  the  third  example. 

143 


GENERAL   BOOK-KEEPING. 


its  date  and  the  date  of  the  larger  side,  (25 ;)  divide  the 
product  (13,750)  by  the  balance  of  the  account,  ($250,)  and 
the  quotient  will  indicate  the  time  when  the  Balance  is  due, 
(55  days,)  reckoned  from  the  date  of  the  larger  side  of  the 
account.  When  the  larger  side  has  the  later  date,  the  time 
must  be  added,  (as  in  this  case ;)  but  when  it  has  the  earlier 
date,  (as  in  the  next  example,)  the  time  must  be  subtracted. 
In  this  example  my  gain  from  the  use  of  $550  the  25  days 
before  June  26th,  is  equal  to  my  loss  of  the  use  of  $250  (the 
balance)  for  55  days.  But  55  days  is  1  month  and  25  days, 
which,  added  to  June  26th,  makes  August  21st.  (Art.  178.) 
Ex.  4.  I  have  an  Exchange  Mdse.  Acct/  with  Henry 
Brown.  His  Debits  amount  to  $800,  and  their  average  date 
is  June  1st.  His  Credits  amount  to  $550,  and  their  average 
date  is  June  26th.  What  is  the  Balance  of  the  account,  and 
when  is  it  due  f  Ans.  $250 ;  due  April  6th. 


Jwne 

/ 

Q/o  QsTuJ^e. 

$00 

00 

fttne 

$6 

^0^ 

550 

00 

April 

6 

Balance    . 

250 

00 

$00 

00 

$00 

00 

= 

Explanation.  This  example  differs  from  the  third  only  in 
the  dates.  Here  the  larger  side  of  the  account  has  the  earlier 
date.  The  computation  is  made  in  all  respects  as  in  the  third 
example,  and  with  the  same  result,  (55  days.)  But  as  the 
larger  side  of  the  account  has  the  earlier  date,  the  time  must 
be  subtracted,  or  counted  back,  as  stated  in  the  explanation 
of  the  last  example.  In  this  case  my  loss  of  the  use  of  $550 
the  25  days  following  June  1st,  is  equal  to  the  gain  that 

QUEST.  196.   State  and  explain  the  fourth  example. 
'144 


EQUATION    OF   PAYMENTS. 


would  arise  from  the  use  of  $250  (the  balance)  for  55  days. 
But  55  days  is  1  month  and  25  days,  which,  subtracted  froip 
June  1st,  leaves  April  6th.  (Art.  178.)  This,  then,  is  tlw 
date  at  which  the  balance  was  due,  and  from  which  interest 
should  be  reckoned. 

197.  These  four  examples  embrace  the  different  cases.of 
averaging  accounts  that  are  liable  to  arise,  beginning  with 
the  simplest.  When  an  account  has  only  debits  or  credits, 
the  average  time  is  computed  as  in  the  second  example. 
When  an  account  has  both  debits  and  credits,  the  average 
date  of  each  is  first  obtained,  as  in  the  second  example.  This 
brings  the  account  to  the  form  of  the  third  or  fourth  example, 
when  it  should  be  treated  as  these  have  been. 

When  an  account  has  debits  or  credits  only,  and  it  is 
required  to  determine  the  average  time  of  payment,  the  pro- 
cess is  called  Simple  Equation ;  but  when  an  account  has 
both  debits  and  credits,  and  it  is  required  to  determine  the 
time  for  the  payment  of  the  balance,  the  process  is  called 
Compound  Equation. 

Equation  of  Payments,  both  Simple  and  Compound,  may 
be  computed  by  interest,  which  some  prefer.  To  do  this,  we 
compute  the  interest  on  the  several  sums  for  the  length  of 
time  we  have  used  as  a  multiplier,  and  then  ascertain  how 
long  it  will  take  the  sum  total,  or  the  required  balanne,  as  the 
case  may  be,  to  earn  the  same  interest.  The  results  are  the 
same,  whichever  method  we  employ. 

Ex.  5.  Sold  Joseph  Sterling  Merchandise  at  four  different 
times,  in  amounts  as  stated  in  the  following  Account  Current. 
The  first  three  bills  are  at  a  credit  of  4  months,  and  the  fourth 


QUEST.  197.  What  do  the  four  examples  given  in  Equation  of  Payments  embrace  f 
How  do  you  obtain  the  average  feme  when  an  account  has  only  debits  or  credits? 
How  do  you  obtain  the  average  time  for  the  payment  of  a  balance,  when  an  account 
has  both  debits  and  credits  ?  When  is  the  equation  of  payments  called  simple,  and 
when  compound?  May  equation  of  payments  be  computed  by  interest  f  Hew?  Ar« 
the  results  the  same  in  both  cases?  What  does  the  Account  Current  in  the  fifth 
example  show  ? 

13  145 


GENERAL    BOOK-KEEPING. 


is  at  a  credit  of  3  months.     Two  Cash  payments  were  made, 
together  amounting  to  $880.00,  which  are  credited. 


/an. 

46 

QtYUtde.  4-vno. 

560 

00 

<5/%a?<. 

25 

«W 

450 

00 

4 

//      ^  // 

3$0 

00 

Q/s6ay> 

W 

// 

430 

00 

7 

J  I 

46 

"      ^// 

340 

00 

April 

22 

Average 

$$0 

00 

©dfil. 

S4 

//      3  // 

400 

00 

Aug. 

5 

Balance 

800 

00 

June 

11 

Average  .    . 

46$0 

00 

4_&0 

00 

Required  to  Determine: 

1st.  What  is  the  average  date  at  which  these  four  Bills 
'.become  due  ?  Ans.  June  llth. 

2d.  What  is  the  average  date  of  the  two  Cash  payments, 
together  amounting  to  $880.00  ?  Ans.  April  22d. 

3d.  When  will  the  Balance  of  the  account  ($800.00) 
become  due  by  Equation  ?  Ans.  August  5th. 

The  answers  to  these  several  questions  are  entered  in  the 
Account  Current  in  Roman  type ;  but  the  learner  should 
determine  them  for  himself,  and  seek  to  acquire  the  mastery 
of  all  the  principles  here  involved. 

When  an  Account  Current  embraces  a  period  of  several 
months,  and  contains  a  large  number  of  small  items,  the  sums 
falling  due  in  any  one  month  are  frequently  added,  and  the 
amount  treated  as  though  falling  due  the  middle  of  the  month, 
or  the  first  of  the  following  month.  Absolute  accuracy  is  in 
this  manner  closely  approximated,  and  much  labor  is  at  the 
same  time  saved  in  the  computation. 

QUEST.  197.  What  three  things  is  it  required  to  determine  ?  What  is  done  when 
tin  Account  Current  embraces  a  period  of  several  monthw,  and  contains  a  large  nura> 
ber  of  items  ?  Is  the  labor  thus  saved  at  the  expense  of  accuracy  ? 

146 


PARTNERSHIPS. 


STORAGE,  DIVIDENDS,  AND  LOSSES. 

198.  The  EQUATION  OF  STORAGE,  the  EQUATION  ofl 
DIVIDENDS,  and  the  ADJUSTMENT  OF  LOSSES,  are  all  deter- 
mined by  the  application  of  a  like  principle  to  that  already 
stated  for  the  Equation  of  Payments.     (Art.  194.) 

PARTNERSHIPS. 

199.  PARTNERSHIP  is  the  associating    of  two  or  more 
persons  for  the   transaction  of  business,  with  an  agreement 
to  share,  according  to  contract,  the  profits  and  losses  arising 
therefrom.     Partnerships  are  simple  and  compound. 

200.  A  SIMPLE   PARTNERSHIP  is  when  the  stock  of 
different  partners  is  employed  in  business  an  equal  length 
of  time.     To  find  each  partner's  share  of  the  gain  or  loss,  say, 

As  the  whole  stock  is  to  each  partner's  stock,  so  is  the  whole 
gain  or  loss  to  each  partner's  share  of  the*  gain  or  loss. 

201.  A  COMPOUND  PARTNERSHIP  is  when  the  stock  of 
different  partners  is  employed  in  business  unequal  lengths 
of  time.     To  find  each  one's  share  of  the  gain  or  loss, 

Multiply  each  partner's  stock  by  the  time  it  has  been  em- 
ployed in  business ;  then  say,  As  the  sum  of  the  products  is  to 
each  product,  so  is  the  whole  gain  or  loss  to  each  partner's 
share  of  the  gain  or  loss. 

Example.  A  and  B  engage  in  business  for  two  years,  and 
agree  to  share  their  gains  according  to  their  stock  in  trade. 
A  at  first  puts  in  $5000.00,  and  at  the  end  of  four  months 
adds  $2000.00.  B  at  first  puts  in  $8000.00,  but  at  the  end 
of  six  months  withdraws  $3000.00.  They  gain  $2980.00. 
What  is  each  one's  share  of  the  gain  ? 

Ans.  A's  share  $1600.00;  B's  share  $1380.00. 

QUEST.  198.  What  is  said  of  Equation  of  Storage,  Dividends,  and  Losses  ?  — 
199.  What  is  Partnership  ?  How  divided  ?  —  200.  What  is  a  simple  partnership  ? 
How  do  you  find  each  partner's  share  of  the  gain  or  loss?  —  201.  What  is  com- 
pound  partnership  ?  How  do  you  find  each  partner's  share  in  the  gain  or  losa  it 
tompound  partnership  ? 

147 


PART     THIRD. 

PHILOSOPHY  AND  MORALS  OF  BUSINESS 


CHOICE   OF  BUSINESS. 

AET.  202.  Scores  of  young  men,  and  many  a  young 
woman,  in  nearly  every  township  and  village  of  our  country, 
are  considering  for  themselves,  and  proposing  to  one  another 
for  solution,  questions  like  these:  What  shall  I  turn  my 
attention  to  for  a  business  for  life  ?  What  can  I  best  do  for 
a  living  ?  And  having  selected  an  employment,  they  inquire : 
What  are  the  legitimate  sources  of  gain  open  to  me  in  my 
chosen  pursuit  ?  How  can  I  honestly  prosecute  my  business 
so  as  most  certainly  to  insure  success  ?  These  and  like  ques- 
tions  will  here  be  examined,  with  the  hope  of  presenting 
considerations  that  shall  aid  in  establishing  rational  plans.for 
successful  business. 

203.  Human  beings  in  solitude,  cut  off  from  all  social 
relations,  may  freely  employ  their  faculties  as  they  choose, 
being  responsible  only  to  their  Creator  for  the  use  they 
make  of  them.  But  when  several  persons  associate  together 
for  mutual  pleasure  and  benefit,  they,  in  the  nature  of  the 
case,  do  so  on  the  ground  of  equality  of  rights.  All  appetites, 
passions,  and  desires,  which  persons  may  properly  indulge  in 
solitude,  may  with  equal  propriety  be  gratified  in  society; 
but  only  in  such  a  manner  as  not  to  interfere  with  the  equal 
rights  of  others. 

QUEST.  202.  What  questions  in  relation  to  the  choice  of  a  business  are  often 
asked?  What  is  the  object  of  considering  such  questions  here?  —  203.  What  free- 
dom  _aay  persons  in  solitude  exercise  ?  Upon  what  basis  do  associations  for  mutual 
pleasure  and  benefit  rest?  What  gratifications  may  persons  seek  in  society,  and  witfc 
what  restriction  ? 

148 


CHOICE    OF    BUSINESS. 


204.  The   law  of  reciprocity,  which   lies   at   the 
foundation  of  civil  society,  recognizes  this  equality  of  rights^ 
and  requires  that  each  person  shall  leave  every  other  one  in 
the  unrestrained  possession  of  that  liberty  which  he  desires 
for  himself;  and  that  all  shall  unite  together  for  the  protection 
of  each  in  the  enjoyment  of  his  natural  rights.     The  teachings 
of  this  law  none  may  disregard. 

205.  But  in  the  formation  of  a  society  where  each  person 
is  acquainted  with  the  law  of  reciprocity,  and  where  each  is 
disposed  to  obey  this  law,  no  one  will  be  required  to  surrender 
any   thing   without   himself  deriving    advantage   therefrom. 
None,  hence,  can  become  losers  in  the  formation  of  a  society 
based  upon  such  principles.     On  the  contrary,  each  will  be  a 
gainer.     Alone,  each  is  weak,  and  unable  to  defend  himself 
in  the  enjoyment  of  his  rights.     Society  hence  undertakes 
to  protect  individuals  in  the  enjoyment  of  their  rights,  and  to 
redress  wrongs  as  they  may  occur.     This,  society  has  a  right 
to  do ;  for  each  individual  is  supposed  to  promise  obedience 
to  the  law  of  reciprocity,  which  is  a  law  of  his  nature,  ana 
which  is  essential  to  the  existence  of  civil  society. 

206.  In  accordance  with  these  principles,  it  is  apparent 
that  each  individual  is,  and  of  right  ought  to  be,  at  liberty  to 
select  any  employment  which  he  may  pursue  with  advantage 
to  himself  and  with  benefit  to  the  community  in  which  he 
lives.     But  if  any  person  determines  upon  an  employment,  the 
practice  of  which  works  ill  to  his  neighbor,  he  thereby  forfeits 
his  claim  upon  society  for  protection  in  its  pursuit,  inasmuch 
as  he  disregards  the  law  which  underlies  the  formation  of 
civil  society,  and  which  is  essential  not  only  to  its  proper 
maintenance  but  to  its  very  existence.     Such  a  one  can  have 

QUEST.  204.  What  i8  said  of  the  law  of  reciprocity*—  205.  What  is  said  of  a 
society  based  upon  the  law  of  reciprocity  ?  Who  are  losers,  and  who  gainers  in  such 
a  society  ?  What  of  persons  alone  ?  What  protection  does  society  afford  ?  Why  may 
society  protect  rights  and  redress  w ron gs  ?  —  206.  What  kind  of  employments  may 
persons  select  ?  When  does  any  one  forfeit  his  claim  upou  society  for  protection  in  a 
pursuit,  and  why  ? 

13*  149 


GENERAL    BOOK-KEEPING. 


no  claim  for  any  thing  better  than  solitude,  and  the  life  of  a 
hermit,  till  he  can  yield  cheerful  obedience  to  the  require- 
ments of  reciprocity.  (Arts.  203  to  205.) 

207.  In  application  of  these  principles  it  is  manifest  that 
any  person  may  properly  raise  corn,  wheat,  and  potatoes, 
which  are  good  for  food.     He  may  build  houses  and  barns, 
make  wagons  and  farm  implements,  and  engage  in  kindred 
useful  employments.     He  may  erect  flouring  mills,  and  buy 
wheat  at  a  fair  price,  and  manufacture  and  sell  flour  at  a 
reasonable  advance.     He  may  in  like  manner  raise  stock, 
and  make  butter  and  cheese.     He  may  sell  wool  to  be  manu- 
factured into  clothing,  and  hides  to  be  made  into  leather,  and 
this  into  boots  and  shoes.     He  may  further  buy  the  surplus 
products  of  the  country,  which  are  not  required  at  home,  and 
exchange  them  for  the  manufactures  and  products  of  others, 
which  his  neighbors  need ;  for  all  this  can  be  done  to  the 
mutual  advantage  of  all'  parties  affected  by  these  several 
transactions.     These  and  other  similar  pursuits  may  be  pros- 
ecuted in  harmony  with  the  requirement  that  we  "do  unto 
others  as  we  would  that  others  should  do  unto  us." 

208.  But  highway  robbery,  theft,  forgery,  gambling  in 
all  its  forms,  and  all  kindred  employments,  are  in  clear  viola- 
tion of  the  law  of  reciprocity.     (Art.  204.)     Their  pursuit  is 
subversive  of  right  and  justice,  and  of  every  principle  that 
underlies  and  permeates  well-regulated  communities.     Civil 
society,  through  its  constituted  authorities,  should  hence  seek 
to  free  itself  from  all  such  modes  of  disturbing  the  public 
peace  and  jeoparding  the  public  weal,  and  in  all  suitable  ways 
discourage  minor  wrongs  generally,  and  every  form  of  em- 
ployment that  tends  to  idleness  and  dissipation,  while  at  the 
same  time  it  should  aim  to  encourage  employments  that  are 


QUEST.  206.  What  claim,  only,  has  lie?  —  207.  Apply  these  principles  to  various 
proper  employments.  —  208.  What  employments  are  in  violafion  of  the  law  of 
reciprocity >  What  should  society  do  with  reference  to  them?  What  employments 
•hould  society  encourage  ? 

150 


LABOR   THE    SOURCE    OF    WEALTH. 

right  and  proper,  and  the  pursuit  of  which  will  best  promote 
the  general  good  of  the  entire  community. 

!  LABOR  THE   SOURCE  OF  WEALTH. 

209.  The   Creator,  who  made  man  with  physical  and 
intellectual  faculties  adapted  to  labor,  has  wisely  ordered  that 
labor  is  necessary  in  order  to  obtain  the  comforts  and  conven- 

j  iences  of  life,  no  less  than  as  a  means  of  preserving  and 
|  improving  physical  and  mental  health.  But  the  laborer  has 
his  reward ;  for  he  alone  is  entitled  to  the  fruits  of  his  industry. 
"While  he  regards  the  rights  of  his  neighbor  he  may  gain  all 
he  can,  and  use  what  he  gains  as  he  will.  This  is  the  reason 
why  human  labor  in  different  countries  is  commonly  exerted 
in  proportion  as  the  rights  of  property  are  understood  and 
enforced. 

210.  We  hence  see  the  wisdom  of  maintaining  correct 
systems  of  popular  education ;  of  every  where  teaching  respect 
to  the  rights  of  property ;  and  of  inculcating  obedience  to  the 
law  of  reciprocity.     We  hence  also  see  the  reason  why  morai 
and  religious  nations  increase  in  wealth,  while  the  vicious  and 
irreligious  struggle  with  poverty. 

211.  While  labor  is  the  source  of  wealth,  it  is  also  true 
that  industry  in  some  pursuits  is  more  productive  than  in 
others,  and  that  the  aptitudes  of  men  for  different  pursuits 
are  very  dissimilar.      It   therefore  becomes  each  person  to 
devote  himself  to  an  employment  for  which  he  has  an  apti- 
tude, and  in  the  pursuit  of  which  he  may  derive  satisfaction 
and  attain  success. 

212.  Simple  labor,  which  is  all  that  is  requisite  in  order 
to  produce  the  necessaries  of  life,  requires  only  the  exercise 


QUEST.  209.  What  is  said  of  the  necessity  for  labor?  What  reward  has  the 
laborer  ?  What  may  he  gain,  and  how  use  his  gains  ?  How  is  labor  exerted  in  dif- 
ferent countries?  —  210.  What  of  education?  What  nations  increase  in  wealth, 
and  what  remain  poor  ?  —  211.  What  is  remarked  of  industry  in  different  pursuits^ 
tnd  of  the  aptitudes  of  men  ?  What  should  each  person  hence  do? 

151 


GENERAL    BOOK-KEEPING. 


of  such  skill  as  may  be  readily  acquired  by  persons  generally, 
The  simplest  forms  of  labor  require  little  more  than  the 
exercise  of  physical  force,  and  are  hence  remunerated  at  the 
lowest  wages.  In  proportion  as  skill  is  associated  with  laboi 
will  ivages  advance.  This  is  because  skill  is  more  rare  than 
physical  force,  and  requires  education  and  practice. 

213.  Beyond  this,  wages  are  affected  by  the  degree  of 
confidence  which  may  safely  be  reposed  in  the  laborer ;  or, 
in  other  words,  by  his  moral  character.     It  is  hence  appro- 
priate for  each  one  to  devote  himself  to  the  highest  form  of 
industry  for  which  he  has  an  aptitude,  and  in  which  he  can 
attain  the  necessary  skill  and  trustworthiness,  provided  there 
is  a  demand  for  such  labor  where  he  resides.     At  all  events, 
every  one  should  do  something,  and  do  it  well.     All  useful 
labor  -  is  honorable.     Each  should  ronder  to  society,  in  such 
form  as  he  is  able,  an  equivalent  for  the  benefits  he  receives. 
This  justice  requires,     The  apostle  accordingly  commanded, 
If  any  man  will  not  work,  neither  let  him  eat. 

HOW  TO  RENDER  LABOR  MOST  PRODUCTIVE. 

214.  We  have  seen  that  labor  is  the  source  of  wealth, 
and  that  wages  are  affected  by  the  skill  of  the  laborer,  and 
by  the  degree  of  confidence  that  may  be  reposed  in  him. 
Beyond  this  we  remark  that  the  productiveness  of  labor  ia 
increased  by  its  association  with  capital.     The  following  illus- 
tration will  show  how  capital,  skill,  and  trustworthiness  sever- 
ally and  conjointly  render  labor  more  productive. 

215.  While  half  a  dozen  men,  with  their  unassisted  hand% 
would  be  engaged  in  constructing  a  rude  hut,  hardly  fit  for 

QUEST.  212.  What  say  you  of  the  skill  necessary  for  the  performance  of  simpk 
labor,  and  of  the  wages  it  will  command  ?  How  does  skill  affect  wages  ?  Why  is  this  ? 
«—213.  Are  wages  affected  by  the  character  of  the  laborer?  To  what  form  of  indus- 
try IP  uy  eacn  devote  himself?  What  should  everyone  do?  What  say  you  of  all 
nselul  labor?  What  should  each  person  render  to  society?  What  said  the  apostle 
Df  him  who  will  not  work?  —  214.  What  has  been  remarked  of  labor,  nndwagesl 
What  viffttct  lias  capital  upon  the  productiveness  of  labor? 


HOW  TO  RENDER  LABOR  MOST  PRODUCTIVE. 

the  occupancy  of  savages,  give  each  of  them  an  ax,  and  thejf 
will  in  the  same  time  make  a  comfortable  log  house.  Give 
them  the  benefit  of  a  saw  mitt,  with  suitable  tools,  and  the 
skill  necessary  for  their  profitable  use,  and  they  will  erect  a 
commodious  dwelling  house,  befitting  a  civilized  state  of 
society.  One  man  with  an  ax  and  a  team  can  gather  more 
wood  for  fuel  in  a  single  day,  than  twenty  men  could  with 
their  unassisted  hands  in  a  week. 

216.  He  who  has  the  full  exercise  of  his  physical  powers, 
but  is  without  skill  in  any  trade  or  business,  can  engage  only 
in  the  simplest  forms  of  labor,  and  as  a  consequence  will  re- 
ceive low  wages.     But  let  a  man  unite  with  his  labor  skill  in 
some  useful  trade,  as  that  of  a  carpenter,  a  mason,  a  wagon- 
maker  or  a  blacksmith,  and  his  services  will  command  higher 
wages.     Unite  with  labor  and  skill  that  trustworthiness  which 
qualifies  a  man  for  the  care  of  a  manufactory,  of  a  flouring 
mill,  of  a  merchant's  counting-room,  or  of  any  important  busi- 
ness, and  his  services,  being  more  valuable  to  his  employer, 
will  be  remunerated  at  a  higher  rate. 

217.  Skill  and  trustworthiness  render  labor  more  pro- 
ductive and  more  desirable,  in  agriculture,  in  the  mechanic 
arts,  in  merchandise,  in  commercial  pursuits  generally,  and 
in  every  branch  of  productive  industry.     It  therefore  be- 
comes each  individual,  on  selecting  an  employment,  to  attain 
in  it  that  skill,  and  to  bring  to  it  that  fidelity,  which  shall 
render  his  services  most  desirable  to  his  employer.     These 
will  enable  him  to  command  higher  wages  while  working  for 
others ;  and  in  case  he  desires  to  engage  in  business  on  hi? 
own  account,  they  will  enable  him  to  procure  a«y  assistance 
he  may  need,  on  the  most  advantageous  terms. 

QUEST.  215.  Show  the  value  of  an  ax,  and  of  a  saw  mill,  with  teo?s  »nd  skiP  in 
<heir  use.  Show  the  value  of  an  ax  and  &  team.  —  216.  What  of  the  wuges  of 
labor  without  skill ?  Whit  effect  u"><5  sJritt  upon  wages?  What  is  the  effect  ii);ou 
wages  when  the  laborer  unites  with  h,s  skill  trustworthiness  ?  —  217.  What  forms 
of  labor  do  skill  and  tru«t worthiness  benefit?  On  selecting  an  employment  wha1^ 
should  each  person  do  ?  in  what  ways  will  skill  and  fidelity  benefit  their  possessor! 

153 


GENERAL    BOOK-KEEPING. 


BENEFITS  FKOM  EXCHANGES. 

218.  Were  every  man  to  labor  in  that  pursuit  for  which 
he  has  the  greatest  aptitude,  each  would  be  engaged  in  the 
production  of  one,  or  at  most  of  but  a  few  things,  while  the 
innocent  gratification  of  his  desires  would  require  the  posses- 
sion and  use  of  a  thousand  products.    The  truth  of  this  propo- 
sition, and  the  benefits  resulting  from  a  division  of  labor,  and 
from  exchanges,  may  be  easily  illustrated. 

219.  The  manufacturer  of  brooms  might  be  able  to  supply 
a  thousand  families  with  thb  product  of  his  industry,  while 
he  requires  but  one  broom  for  his  own  use,  and  yet  himself 
be  destitute  of  bread;  while  the  farmer  might  raise  bread 
stuffs  enough  to  supply  a  hundred  families,  and  still  himself 
be  destitute  of  a  broom.     The  same  might  be  true  of  the  boot 
and  shoe  maker,  of  the  chair  maker,  of  the  blacksmith,  of  the 
wagon  maker,  and  of  a  score  of  persons  engaged  in  different 
pursuits.     Such  considerations  as  these  create  the  necessity 
for  exchanges,  by  which  men  are  enabled  to  dispose  of  their 
surplus  products,  which  they  can  not  themselves  use,  and  re- 
ceive therefor  the  products  of  others,  which  they  have  not, 
but  which  they  need. 

220.  Each  person,  by  thus  producing  that  in  which  he  is 
well  skilled,  and  for  which  he  has  the  greatest  aptitude,  and 
by  exchanging  the  same  with  others  who  have  also  a  surplus 
of  their  own  products,  is  enabled  to  .derive  enjoyment  from 
the  possession  and  use  of  a  thousand  productions,  and  is  con-* 
eequently  happier  than  he  would  otherwise  be.     And  as  the 
same  is  true  of  all  persons,  we  can  see  the  advantage  that 
would  result  to  each  and  to  all  —  to  individuals  and  to  com- 
munities —  from  a  division  of  labor  and  from  exchanges. 


QUEST.  218.  What  would  be  the  result  wer^  every  man  to  labor  in  that  pursuit 
for  which  he  lias  the  greatest  aptitude  ?  —  219.  Illustrate  the  benefits  derivable  fr^m 
exchancres. —  220.  Show  the  influence  of  a  division  of  labor  aud  of  exchanges  upon 
foe  well  being  aud  happiness  of  persons  and  communities. 

154 


HOW   MERCHANTS    ARE    USEFUL. 


221.  In  fixing  the  exchangeable  value  of  products,  the 
desirableness  of  the  employment,  the  amount  of  labor,  and 
the  degree  of  skill  which  are  required  in  their  production, 
must  be  taken  into  the  account. 

. 
HOW  MERCHANTS  ARE  USEFUL. 

222.  It  is  desirable  to  effect  these  exchanges  with  all 
practicable  economy ;  and  the  more  rapidly  they  are  made 
the  better  for  all.     It  is  from  this  consideration  that  merchants 
become  necessary  in  facilitating  exchanges.     The  merchant 
receives  from  each  of  his  customers  their  surplus  products, 
which  they  can  not  themselves  use,  and  is  thus  enabled,  by 
exchange  in  kind,  to  supply  the  wants  of  others.     He  is  in 
this  manner  enabled  to  conduct  the  exchanges  for  a  whole 
neighborhood  more  perfectly,  and  at  less  expense  of  time  and 
labor,  than  though  each  producer  were  to  conduct  his  own 
exchanges  without  the  merchant's  aid. 

223.  Intelligence  and  skill  are  essential  to  constitute  a 
succesful   merchant,  for  they  enable  him  to  seek  from  one 
class  of  his  customers  what  he  knows  another  class  need,  and 
to  receive  from  these  such  products  as  will  be  required  by 
others.     It  is  thus  that  the  merchant  is  enabled  to  make  the 
exchanges  which  his  customers  require,  more  cheaply  than 
they  could  do  it  among  themselves  without  his  agency,  and 
still  receive  from  each  enough  to  compensate  him  for  his  skill 
and  labor,  and  for  the  use  of  his  capital. 

224.  The  principle  is  the  same  with  different  nations, 
when  each  is  enabled  to  produce  an  excess  of  one  class  of 
productions  which  are  desired  by  the  other.     The  wholesale 
merchant  buys   the    surplus   products  of  his  own  country, 

QUEST.  221.  What  circumstances  must  be  taken  into  the  account  in  fixing  the 
exchangeable  value  of  products  ?  —  222.  What  is  remarked  of  the  cost  of  exchanges, 
and  of  the  rapidity  with  which  they  are  made?  Show  how  merchants  are  useful  in. 
effecting  exchanges  in  kind.  —  223.  Of  what  advantage  are  intelligence  and  skill  to 
the  merchant?  How  are  his  customers  benefited  by  the  merchant's  intelligence  and 
skill?  —  224.  When  may  nations  be  benefited  by  exchanges? 

155 


GENERAL    BOOK-KEEPING. 


where  they  are  not  needed,  and  exchanges  them  with  the 
merchant  of  another  country,  where  they  are  desired,  for  their 
surplus  products,  which  can  not  be  raised  in  his  own  country, 
but  which  his  customers  nevertheless  need.  The  people  of 
each  country  are  thus  enabled  to  gratify  more  innocent  de- 
sires, and  are  consequently  happier  than  they  were  before. 

225.  In  exchanges  which  are  conducted  on  the  principle 
here  stated,  each  party  is  benefited.     And  the  most  favorable 
commerce  to  any  country  is  that  which  enriches  all  countries 
affected  by  it  most  rapidly.     It  is  with  nations  as  with  indi- 
viduals  engaged   in  commerce:    each  derives   the   greatest 
benefit  to  itself  while  most   industriously  and  successfully 
laboring  to  supply  the  wants  of  the  other.     So  intimately  are 
the  interests  of  each  united  with  the  welfare  of  others,  that  a 
bargain  should  never  be  made  unless  both  parties  to  it  can 
be  gainers  thereby.     This  principle  applies  to  single  persons, 
to  separate  communities,  and  to  different  nations. 

HOW  MONEY  FACILITATES  EXCHANGES. 

226.  When  we  have  any  work  to  be  done  it  is  desirable 
to  effect  it  in  the  best  manner  possible,  and  at  the  least  ex- 
pense practicable.     This  is  the  reason  why  we  use  a  wagon  for 
transporting  merchandise,  and  for  carrying  the  products  of 
the  farm  to  market  in  summer  and  autumn,  and  a  sleigh  in 
winter,  and  why  we  employ  a  steamboat,  a  vessel,  or  a  rail  car, 
in  preference  to  either  sleigh  or  wagon,  when  practicable. 

227.  We  have  already  seen  that  the  services  of  the  mer- 
chant enable  us  to  effect  exchanges  more  rapidly  and  more 
economically  than  could  otherwise  be  done.     (Arts.  222  to 
225.)     But  it  frequently  happens  that  persons  desire  to  sell 
more  or  less,  in  value,  of  their  products,  than  they  wish,  at  the 


QUEST.  224.  How  are  such  exchanges  effected  ?  How  do  they  influence  national 
happiness  ?  —  225.  Who  are  benefited  by  such  exchanges  ?  What  is  the  most  favor- 
able commerce  to  any  country  ?  When  only  should  a  bargain  be  made  ?  —  226, 
How  is  it  desirable  to  do  any  kind  of  work  ?  Illustrate. 

156 


BANKS    AND    BANKING. 


time,  to  receive  in  return  of  the  products  of  others.  More* 
over,  they  often  want  to  sell  their  own  products  without  pur- 
chasing any  thing  in  return.  So,  likewise,  they  frequently 
desire  to  purchase  the  products  of  others  when  they  have 
none  of  their  own  to  dispose  of.  To  meet  such  necessities 
some  object  of  universal  desire  has  been  found  needful. 

228.  As  a  means  of  adjusting  such  difference,,,  and  of 
facilitating  exchanges,  the  nations  of  the  earth,   generally, 
have    agreed   upon   a   metallic   currency   as   this   object  of 
universal   desire.     It   is   because   the  precious  metals  have 
been  found  the  most  convenient  instrument  in  effecting  ex- 
changes that  they  have  been  so  universally  employed  for  this 
purpose.     But   for   this   circumstance,  oranges,  or  precious 
stones,  or  some  other  instrument,  might  as  well  have  been 
used  as  they.     (Arts.  252  to  257.) 

229.  The  money  of  civilized  nations  generally,  consists 
of  silver  and  gold ;  or  of  these  and  a  paper  currency,  which 
is  adopted  from  economy  and  convenience,  and  which  is  re- 
deemable in  the  precious  metals.     Every  person  having  any 
thing  to  sell  is  willing  to  dispose  of  it  for  silver  and- gold,  (or 
their  representative ;)  for  he  knows  that  with  these  he  can 
procure  any  thing  he  desires. 

9 

OF  BANKS   AND   BANKING. 

230.  Banks  were  originally  designed  as  institutions  ft* 
*  the  deposit  and  safe  keeping  of  money.     They  are  of  three 

kinds:  (1.)  Banks  of  Deposit;  (2.)  Banks  of  Discount; 
and,  (3.)  Banks  of  Circulation.  Two  of  these  functions, 
and  not  unfrequently  all  three  of  them,  are  performed  by  the 
same  institution,  and  with  advantage,  as  we  shall  presently  see. 

QUEST.  227.  Why  is  some  object  of  universal  desire  necessary  in  effecting  ex- 
changes?—  228.  What  has  been  agreed  upon  as  this  object  of  universal  <l"sire? 
Why  have  the  precious  metals  been  employed  in  effecting  exchanges?  —  229.  Of 
what  does  the  money  of  civilized  nations  generally  confist?  Why  are  persons  will- 
ing to  sell  their  surplus  products  for  silver  and  gold?  — 230.  What  was  the  original 
iesign  of  banks  ?  Of  how  many  kinds  are  banks,  and  what  are  they  ? 
14  157 


GENERAL    BOOK-KEEPING. 


231.  There  is  also  another  classification  of  banks  having 
reference  both  to  the  authority  from  which  they  derive  their 
origin  and  powers,  and  to  the  functions  they  perform.     The 
second  arrangement  is  likewise  into  three   classes,  namely: 
(1.)  Commercial  Banks ;  (2.)  State  Banks;  and,  (3.)  Private 
Banks. 

BANKS   OF  DEPOSIT. 

232.  Banks  of  Deposit  are  useful  for  the  safe  keeping 
of  money.     The  precious  metals  are  small  in  bulk,  and  are 
therefore  very  liable  to  be  stolen.     The  coins,  of  the  same 
denomination  being  made  precisely  alike,  can  not  be  identified 
in  case  they  are  stolen.     Great  care  is  hence  necessary  to 
protect  them.     The  security  of  each  person  against  robbery 
requires  that  his  money  be  kept  in  a  safe.     Otherwise  house- 
breaking  and  highway  robbery  would  become  frequent.    But 
one  trusty  person,  with  a  good  safe,  may  serve  as  banker  for 
a  neighborhood  or  village,  and   at   less   expense  keep  the 
money  of  twenty  merchants  with  greater  safety  than  each 
could  keep  his  own. 

233.  This  method  of  keeping  the  money  of  a  neighbor- 
hood or  village  has  several  advantages.     The  banker  opens 
an  account  with  each  merchant  and  person  depositing  money 
with  him.     He  credits  each  one  for  the  amount  he  deposits, 
and  debits  him  for  the  sums  he  withdraws.     Each  individual 
having"  money  on  deposit  is  at  liberty  to  draw  it  out  in  person, 
as  he  mry  need  it  for  use;  or  he  may  give  a  check  on  the 
banker  requesting  him  to  pay  it  to  another  person  who  may 
himself  have  an  account  at  the  bank. 

234.  Suppose  A,  who  has  money  deposited  in  a  bank, 
wishes  to  pay  B  five  hundred  dollars.     His  easiest  way  to 
do  it  is  to  give  B  a  check  on  the  bank  for  this  sum.     If  B 

QUEST.  231.    Into  how  many  classes  is  the  second  arrangement  of  banks,  and 

•what  are  they  ?  —  232.  How  are  Banks  of  Deposit  useful  ?     State  at  length  how  they 

|     are  useful.— 233.  How  are  accounts  kept  at  banks?      How  may  persons  having 

money  on  deposit  use  it  ?  —  234.  State  how  several  persons  who  keep  their  accounts 

at  the  same  bank  may  most  conveniently  pay  and  receive  woaey. 

158 


BAXES    OF    DEPOSIT. 


does  not  require  the  money  for  use  at  the  time,  on  presenting 
his  check  at  the  bank  the  banker  will  charge  A  five  hundred 
dollars,  and  credit  B  the  same  a'nount.  If  B  wishes  to  pay 
C  five  hundred  dollars  he  will  do  it  in  the  same  way.  C 
might  wish  to  pay  D,  and  D  might  owe  A  the  same  amount, 
and  both  wrould  make  payment  in  like  manner.  At  the  close 
of  the  day  each  man's  bank  account  would  stand  as  it  was  in 
the  morning ;  and  yet  each  of  these  four  persons  has  received 
five  hundred  dollars,  and  each  has  paid  out  five  hundred 
dollars.  A  fe'w  entries  in  the  books  of  the  bank  thus  save 
the  handling  and  counting  of  four  thousand  dollars,  the  wear 
of  coin,  the  liability  to  loss,  and  the  temptation,  from  exposure, 
to  theft  and  robbery. 

235.  The  case  will  be  essentially  the  same  with  each  of 
twenty  merchants  who  keep  their  accounts  at  the  same  bank ; 
for  it  is  evident  that  every  merchant  will,  on  the  whole,  buy 
as  much  as  he  sells,  and  sell  as  much  as  he  buys.     He  will, 
therefore,  not  only  have  occasion  to  deposit  as  much  money 
as  he  withdraws,  but  in  any  given  time  he  will  withdraw 
nearly  the  amount  he  deposits. 

236.  And  what  is  true  of  four  men  or  twenty  merchants 
for  a  day  or  a  week,  will  be  true  of  all  men  in  the  community 
for  all  tune.     And  what  is  true  of  one  bank  will  be  true  of 
any  number  of  banks  that  are  required  for  the  transaction 
of  the  business  of  a  city ;  for  at  the  close  of  each  day,  banks 
holding  checks  upon  each  other  that  have  been  deposited 
with  them  by  their  customers,  exchange  these  checks,  the 
bank  that  holds  the  least  amount  in  checks  pr  drafts  upon 
the  other  paying  the  difference  in  money. 

237.  Banks  of  Deposit  generally  unite  with  them  the 
functions  of  Banks  of  Exchange,  to  the  mutual  advantage  of 

QUEST.  234.  What  is  thus  saved  by  a  few  entries  in  the  books  of  a  bank  ?  — 
235.  Will  the  same  be  true  of  a  greater  number  of  persons,  and  why  ?  —  236.  Show 
how  the  same  is  true  of  any  number  of  persons,  and  of  different  banks  in  the  «ame 
city.  —  237.  What  other  functions  do  Banks  of  Deposit  perform,  and  to  wiiose 
benefit  ? 

159 


GENERAL    BOOK-KEEPING. 


their  customers  and  themselves,  as  we  shall  presently  see, 
(Arts.  238  to  242.) 

238.  It  is  manifest  that  cities  and  states,  as  well  as  indi- 
viduals and  merchants,  will,  on  the  whole,  buy  as  much  as 
they  sell,  and  sell  as  much  as  they  buy.     If  Detroit,  for  ex- 
ample, buys  one  hundred  thousand  dollars'  worth  of  merchan- 
dise of  New  York,  Detroit  must  send  one  hundred  thousand 
dollars'  worth  of  products  with  which  to  pay  for  it ;  or  each 
city  must  pay  for  its  purchases  of  the  other  in  money.     If 
Detroit  pays  New  York  money  for  goods,  it  is  apparent  that 
New  York  must  pay  Detroit  money  in  return  for  products 
received.     This  will  require  that  the  goods  and  products  pur- 
chased of  one  another  by  these  two  cities,  and  the  money  paid 
for  them,  be  both  transported  from  each  city  to  the  other  at 
every  exchange,  which  would  involve  great  expense,  delay, 
and  hazard.     (Art.  232.) 

239.  All   this   inconvenience   may   be   avoided   by   the 
agency  of  banks  in  these  two  cities.     Let  us  suppose  that  A, 
in  Detroit,  sells  ten  thousand  dollars'  worth  of  flour  to  B,  of    j 
New  York.     Instead  of  counting  the  specie,  and  being  at  the 
expense  and  risk  of  conveying  it  to  Detroit,  it  is  evident  A 
may  draw  on  B  for  the  amount,  to  be  paid  to  whomsoever 
A  shall  direct.     And  suppose  again  that  C,  in  New  York, 
sells  ten  thousand  dollars'  worth  of  merchandise  to  D,  of  De- 
troit.    It  is  plain  that  C  is  entitled,  in  like  manner,  to  draw 
on  D  for  this  amount.     Now  A,  of  Detroit,  who  has  ten 
thousand   dollars  due  him  in  New  York,  may  make  his  draft 
on  B  for  this  amount,  and  deposit  it  to  his  own  credit  in  the 
Detroit  Bank,  through  which  he  does  his  business.     In  like 
manner.  C,  of  New  York,  who  has  ten  thousand  dollars  due 
him  in  Detroit,  may  make  his  draft  on  D  for  the  same  amount, 

QUEST.  238.  What  is  remarked  of  the  purchases  and  sales  of  cities  and  states? 
Give  an  illustration,  and  state  the  manner  of  payment.  —  239.  Through  what  agency 
may  the  payment  of  money  from  one  city  to  another  be  must  easily  made  ?  State  at 
length  how  payment  may  be  made  by  the  agency  of  banks,  in  case  of  purchases  and 
lales  between  persons  residing  in  different  cities,  as  Detroit  and  ISew  York. 

160 


BANKS    OF    DEPOSIT. 


and  deposit  it  to  his  credit  in  the  New  York  Bank,  through 
which  he  transacts  his  business.  In  this  way  A,  of  Detroit, 
and  C,  of  New  York,  obtain  each  a  credit  of  ten  thousand 
dollars  in  his  own  bank.  Each  credit  is  based  on  a  draft 
upon  a  person  residing  in  the  other  city,  the  payment  of 
which  the  drawer  guarantees.  The  two  banks  exchange 
these  drafts  by  mail,  each  debiting  the  other  for  the  draft 
sent,  and  each  crediting  the  other  for  the  draft  received. 
Now,  each  bank  charges  ten  thousand  dollars  to  its  own  de- 
positor to  cover  the  draft  it  holds,  each  bank  retaining  the 
draft  thus  charged  as  its  voucher  on  settlement  with  its 
depositor.  In  this  manner  the  indebtedness  of  persons  in  each 
of  these  two  cities,  to  persons  in  the  other  city,  is  exchanged; 
and  the  frequent  transmission  of  large  amounts  of  money  is 
thus  saved.  Now,  all  this  costs  but  a  few  cents  postage,  and 
a  few  entries  in  the  books  of  each  bank ;  and  there  is  thus 
saved  the  time,  the  cost,  and  the  risk  of  transporting  twenty 
thousand  dollars  between  these  two  cities.  It  is  evident  that 
these  banks,  beside  their  own  compensation  for  services  thus 
rendered,  will  by  this  means  be  enabled  to  save  a  considerable 
amount  to  their  customers. 

240.  What  we  have  supposed  true  of  four  persons  re- 
siding in  these  two  cities  must  be  essentially  true  of  any 
number  of  persons  residing  in  commercial  centers  in  different 
states,  or  in  foreign  countries.  There  may  be  this  difference. 
One  state  or  city  may  buy  of  another  more  or  less  than  it 
sells  to  it  in  return.  In  such  cases  the  party  making  the 
Jargest  purchases  must  sell  enough  to  other  states  and  cities 
to  make  up  the  difference.  Whenever  the  trade  between 
two  cities  is  unequal,  that  whose  sales  to  the  other  are  least, 
must  make  up  the  difference  in  drafts  upon  other  cities  or 
states  to  which  it  makes  sales,  or  by  payment  in  money. 

QUEST.  239.   What  is  the  actual  cost  of  this  mode  of  payment,  and  what  is  saved 
by  it?—  240.  Is  the  same  principle  of  general  application?     What  difference  may 
there  be,  and  how  must  it  be  made  up  ?     What  of  inequality  of  trade  be'.ween  cities 
generally,  and  how  is  the  difference  made  up? 
15  *  1G1 


GENERAL    BOOK-KEEPING. 


241.  If  Michigan,  for  example,  buys  more  merchandise 
of  New  York  than  New  York  desires  of  the  products  of 
Michigan  in  payment,  the  difference  may  be  made  up  by 
sales  of  the  products  of  Michigan  to   New   England,  and 
the  balance  due  to  New  York  may  be  paid  in  the  drafts 
of  Michigan  on  New  England.     Any  difference  arising  in 
this  or  any  other  way,  it  is  plain  can  be  made  up  by  sending 
specie,  or  bank  notes  redeemable  in  specie,  to  the  city  or 
country  whose  sales  are  the  largest,  in  such  amounts  as  shall 
be  necessary  to  make  up  the  deficiency.     In  such  cases  the 
equilibrium  can  be  restored  through  the  agency   of   Banks 
of  Exchange,  with  greater  expedition,  economy,  and  safety, 
than  by  individual  dealers  without  the  aid  of  banks. 

242.  It  is  manifest  that  the  principles  just  elucidated  will 
apply  with  like  effect  in  equalizing  exchanges  between  Chi- 
cago and  Boston,  Cincinnati  and  Philadelphia,  New  Orleans 
and  St.   Louis ;   or   between  any  two  of  these  cities,  and 
between  all  cities  and  countries  however  remote  from  each 
other. 

BANKS   OF  DISCOUNT. 

243.  All  production  results,  as  we  have  seen,  from  the 
application  of  industry  to  capital.     (Art.  209.)      Now  the 
closer  the  connection  between  industry  and  capital,  the  more 
rapid  will  be  the  increase  in  production.     But  some  men 
have  industry  and  skill,  without  capital,  and   must   hence 
labor,  if  at  all,  for  others  ;  while  other  men  have  capital,  but 
from  age,  or  circumstances  in  life,  have  not  the  industry  and 
skill  which  are  required  to  be  united  with  it  in  order  to  render 
it  productive.     It  is  manifest  that,  in  such  cases,  both  parties 
may  be  benefited  by  an  equitable  arrangement  for  uniting 


QUEST.  241.  When  the  trade  between  Michigan  and  New  York  is  unequal,  how 
may  the  difference  be  made  up  ?  How  may  any  difference  always  be  made  up  ?  Ar« 
banks  in  such  cases  serviceable?  — 242.  Of  how  general  application  are  these  prin- 
ciples?—  243.  Of  what  is  production  the  result?  When  one  person  has  industry 
aud  skill,  and  another  has  capital,  how  may  both  parties  be  benefited  ? 

162 


BANKS    OF    DISCOUNT. 


the  industry  and  skill  of  the  former  with  the  capital  of  the 
latter.     But  how  shall  this  union  be  accomplished  ? 

244.  Now,  Banks  of  Discount  offer  facilities  for  bringing 
together  borrower  and  lender,  and  for  the  union  of  the  indus- 
try and  skill  of  the  one,  with  the  capital  of  the  other,  in  such 

.  a  manner  as  shall  be  most  advantageous  to  each.  Banks  are 
enabled  to  perform  this  office  on  much  the  same  principle 
that  gives  merchants  the  ability  to  serve  the  community  in 
facilitating  exchanges.  (Arts.  222  to  225.) 

245.  Persons  who  have  money  which  they  wish  to  lend, 
associate  themselves  together  and  establish  a  bank,  at  which 
others  apply,  wrho  wish  to  borrow.     The  stockholders  appoint 
a  president  and  cashier,  and  elect  the  necessary  directors  to 
superintend  the  business  of  the  bank.     These  officers  devote 
their  attention  to  the  safe  and  advantageous  loaning  of  money, 
and  to  looking  after  the  varied  interests  of  the  bank,  without 
requiring  the  constant  attention  of  the  stockholders  generally, 
who  are  thus  left  at  liberty  to  engage  in  other  pursuits. 

246.  While  banks  are  thus  taking  care  of  their  own 
money,  they  are  enabled  often  to  serve  their  neighbors  in  the 
safe-keeping  of  any  moneys  they  possess,  which  they  do  not 
wish  for  the  time  to  employ  in  business  themselves,  while  at 
the  same  time  the  banks  may  derive   sufficient  advantage 
from  the  use  of  such  moneys  to  compensate  them  for  their 
trouble.     It  will  readily  be  seen  that  such  an  arrangement 
affords  greater  facilities  for  the  constant  union  of  labor  with 
capital,  and  for  the  increased  productiveness  of  a  country, 
than  would  otherwise  exist.     While  banks  are  thus  beneficial 
to  the  whole  community,  they  will  be  especially  advantageous 
to  both  borrower  and  lender. 

QUEST.  244.  For  what  do  Banks  of  Discount  offer  facilities?  How  are  banks 
enabled  to  perform  this  service  ?  —  245.  How  are  banks  organized,  and  what  officers 
are  employed?  —  246.  How  may  banks  be  serviceable  to  their  neighbors  in  the 
safe-keeping  of  moneys?  How  are  banks  compensated  for  the  care  of  such  moneys? 
How  do  such  arrangements  affect  the  union  of  labor  with  capital  ?  To  whom,  then, 
are  banks  beneficial,  and  to  whom  are  they  especially  advantageous  ? 


GENERAL    BOOK-KEEPING. 


247.  SAVINGS  BANKS,  which  are  of  recent  origin,  de- 
serve to  be  mentioned  in  this  connection.     While  Banks  of 
Discount  generally  and  properly  decline  to  pay  interest  on 
moneys  deposited  with  them,  and  subject  to  withdrawal  at 
any  time,  and  dislike  to  receive  small  sums  on  deposit  at  all, 
it  is  the  design  of  Savings  Banks  to  afford  those  who  have 
any  thing  to  spare,  though  in  small  amounts,  an  opportunity 
to  deposit  their  savings  in  safety,  and  to  receive  interest  for 
sums  deposited  from  time  to  time,  by  which  means  they  pro- 
vide against  seasons  of  sickness  and  distress,  and  insure  a 
competency  for  age.     This  can  be  done,  when  moneys  so 
deposited  are  not  subject  to  be   withdrawn  without  timely 
notice,  and  still  pay  a  few  responsible  persons  for  the  care  of 
the  savings  of  the  many  who  deposit  in  them. 

248.  Savings    Banks,   which   were   first   established   in 
Great  Britain  in  the  early  part  of  the  present  century,  have 
been  rapidly  introduced  into  most  civilized   countries,   and 
with  great  advantage  to  that  class  of  persons  for  whose  benefit 
they  were  established.     They  also  benefit  the  prudent  bor> 
rower,  and  the  whole  community ;  for  while  they  encourage 
industry,  temperance,  and  frugality,  with  the  poorer  classes, 
they  at  the  same  time  serve  more  closely  to  unite  the  entire 
capital  and  industry  of  the  country.     (Arts.  214  to  217.) 

BANKS   OF   CIRCULATION. 

249.  While  Banks  of  Circulation  usually  perform  the 
functions  of  Banks  of  Deposit,  of  Exchange,  and  of  Discount, 
as  we  have  already  considered  them,  they  add  thereto  the  fea- 
ture of  issuing  their  own  notes  for  circulation  as  money,  which 
notes  are  redeemable  in  specie  on  presentation  at  the  bank. 

QUEST.  247.  Do  banks  generally  pay  interest  on  deposits  subject  to  withdrawal? 
Do  they  like  to  receive  small  sums  on  deposit  ?  What  is  the  design  of  Savings  Kanks? 
When  can  interest  be  safely  allowed  on  deposits?  —  248.  When  and  where  were 
Savings  Banks  first  established ?  Into  what  countries  have  they  been  introduced? 
Who  are  benefited  by  savings  banks,  and  how  ?  —  249.  What  functions  do  Buuks 
of  Circulation  perform  ? 

164 


QUALITY  AND  FUNCTIONS  OF  MONEY. 

250.  The   Bank  of  Venice,  which  was   established   in 
1171,  was  a  Bank  of  Deposit  only.     The  Bank  of  Amster- 
dam, which  was  established  in  1 609,  and  the  Bank  of  Ham- 
burg, established  in  1619,  were  both  Banks  of  Deposit  and 
Exchange.     The  Bank  of  England,  established  in  1694,  the 
Bank  of  France,  established  in  1716,  and  the  Banks  of  the 
United  States,  chartered  in  1791  and  in  1816,  were  all  Banks 
of  Deposit  and  Exchange,  and  of  Discount  and  Circulation. 

251.  Banks   during   the   present   century  have   become 
more  numerous,  and  have  generally  owed  their  existence  to 
special  acts  of  the  State  Legislatures  where  they  have  been 
located.     But  Free  Banking  Laws  are  now  in  operation  in 
several  of  the  states,  under   general   laws  and  regulations.) 
calculated  alike  to  benefit  and  protect  both  the  banks  and 
the  bill  holders,  and  at  the  same  time  to  subserve  the  interests 
of  the  entire  community  among  whom  the  bills  circulate' 
(Arts.  255  to  257.) 

QUALITY  AND  FUNCTIONS  OF  MONEY. 

£32.  Money,  as  we  have  seen,  is  an  instrument  for  facili- 
tating exchanges.  (Arts.  226  to  229.)  This  it  does  by 
furnishing  an  object  of  universal  desire  to  produce  an  equi- 
librium where  exchanges  in  kind  are  unequal. 

253.  That  is  the  best  instrument  for  effecting  exchanges 
tvhich  enables  us  to  accomplish  the  object  in  the  shortest 
|  time,  with  the  greatest  ease,  and  at  the  least  expense.  A 
metallic  currency,  consisting  of  silver  and  gold,  has  by  com- 
mon consent  been  agreed  upon  as  this  instrument.  There 
are  several  circumstances  which  contribute  to  render  it  a 


QUEST.  250.  What  is  remarked  of  the  earlier  banks,  and  when  were  they  estab- 
lished ?  —  251.  What  of  banks  during  (he  present  century  ?  What  is  said  of  Free 
Banks  ?  Under  what  re<jnlatIonR  are  fr<*e  banks  established,  and  whose  interests  are 
subserved  by  them  ?  —  252.  What  is  money  ?  How  does  money  facilitate  exchanges  ? 
—  253.  What,  is  the  best  instrument  for  effecting  exchanges  ?  What  has  been  agreed 
upon  as  this  instnimput?  What  circumstances  render  silver  and  gold  a  desirable 
instrument  for  effecting  exchanges  ? 

165 


GENERAL    BOOK-KEEPING* 


desirable  instrument  for  this  purpose,  among  which  are  the 
following.  (1.)  The  labor  necessary  to  its  production  is 
but  slightly  variable  at  different  times  and  in  different  places. 
(2.)  A  small  bulk  represents  great  value,  or  a  large  amount 
of  labor  in  its  production.  (3.)  The  precious  metals  are 
susceptible  of  division  without  loss  of  value.  (4.)  They  are 
easily  verified,  and  their  great  weight  affords  a  ready  means 
for  the  detection  of  adulteration.  (5.)  They  are  slightly 
liable  to  decay,  or  to  diminution  in  value,  except  by  wear ;  and, 
(6.)  Being  of  different  values,  silver  may  be  employed  for 
coins  of  the  lower  denominations,  and  gold  for  the  higher. 
All  of  these  circumstances  conspire  to  render  the  precious 
metals  a  desirable  instrument  for  facilitating  exchanges. 

254.  Government  lends  its  aid  in  further  rendering  silver 
and  gold  a  desirable  instrument  for  conducting  exchanges. 
This  it  does  by  regulating  the  purity,  the  size,  and  the  form 
of  different  coins,  so  as  to  render  them  most  safe  and  conven- 
ient for  general  use,  and  by  causing  the  work  of  coining  to 
be  done  in  the  best  manner  possible,  and  at  the  least  expense, 
so  as  most  effectually  to  guard  against  counterfeiting.     We 
will  now  see  how  banks  are  further  useful  in  facilitating 
exchanges.     (Arts.  232  to  242,  and  255  to  264.) 

255.  Banks  are  generally  and  properly  required  by  their 
charters,  or  the  laws  authorizing  their  establishment,  to  de- 
posit state  stocks,  or  other  good  and  reliable  securities,  with 
the  state  treasurer,  in  sufficient  amount  to  insure  the  payment 
of  all  bills  they  are  authorized  to  issue.     As  a  further  pro- 
tection against  loss  to  bill  holders  from  fraud  or  otherwise,  the 
bills  issued  are  required  to  bear  the  signature  of  a  state 
register.     When  good  and  sufficient  securities  are  thus  given, 
the  holders  of  bank  bills  are  well  protected  against  loss ;  for 

QUEST.  254.  Does  Government  aid  in  rendering  silver  and  gold  a  desirable  instru- 
ment for  conducting  exchanges  ?  What  does  government  regulate,  and  with  what 
Advantage  to  the  public? — 255.  What  security  are  banks  required  to  give  for  th& 
redemption  of  their  bills  ?  Why  are  bank  bills  required  to  be  countersigned  by  a 
•tate  register?  Show  how  bill  holders  are  protected  against  loss  from  bank  failures. 

166 


COMMERCIAL    BANKS. 


in  case  the  banks  fail  to  pay  their  notes,  the  state  has  the 
means  of  their  redemption  in  the  stocks  deposited. 

256.  Where   bank   notes  are  redeemable  in  specie  on 
presentation  at  the  banks  issuing  them,  it  is  apparent  that 
holders  prefer  the  notes  to  the  specie ;  otherwise  they  would 
go  to  the  banks  and  exchange  the  notes  for  the  specie. 

257.  Bank  notes,  redeemable  in  specie  on  presentation 
at  the  bank,  possess  the  following  advantages  over  specie. 
(1.)     While  they  answer  equally  well  as  an  instrument  in 
effecting  exchanges,  they  possess  less  intrinsic  value.     (2.) 
The  wear  and  tear  from  their  use  is  less  than  that  of  silver 
and  gold.     (3.)     They  are  more  easily  counted,  and  more 
cheaply   and   more   conveniently   transported.      (4.)     They 
occupy  less  space,  and  attract  less  notice,  and  are  hence  less 
liable  to  be  stolen ;  and,  (5.)  If  stolen,  they  are  more  easily 
identified  than  specie,  and  may  hence  be  more  readily  recovered. 

258.  We  come  now  to  consider  other  functions  performed 
by  banks  as  commercial  institutions  of  the  country,  and  the 
authority  from  which  they  derive  their  origin  and  powers, 
which  have  given  rise  to  the  second  classification  named. 
(Art.  231.)     The  second  arrangement,  like  the  former,  is  into 
three  classes,  namely:    (1.)   Commercial  Banks;   (2.)  State 
Banks ;  and  (3.)  Private  Banks. 

COMMERCIAL  BANKS. 

259.  Commercial  Banks  are  banks  located  in  commercial 
centers,  and  designed  to  facilitate  commercial   intercourse. 
Their  bills  are  mostly  of  large  denominations,  being  of  $50 
to  $500,  and  frequently  of  $1000  to  $10,000.     The  business 
of  such  banks  is  often  conducted  by  drafts  upon  each  other 
of  such  amounts  as  may  suit  the  convenience  of  their  custom- 

QUEST.  256.  When  do  the  holders  of  bank  notes  prefer  them  to  specie?  —  257. 
What  advantages  do  bank  notes  redeemable  in  specie  on  presentation  at  the  bank 
possess  over  specie  ?  —  258.  What  is  the  second  classification  of  banks  given  ?  — 
259.  What  are  Commercial  Banks?  What  is  the  size  of  their  bills?  What  use  du 
rommercial  banka  often  make  of  drafts  ? 

167 


GENERAL    BOOK-KEEPING. 


ers.  The  larger  notes  and  drafts  are  employed  chiefly  in 
adjusting  balances  between  wholesale  dealers  in  commercial 
centers,  as  New  York  and  Boston,  Philadelphia  and  Cincin- 
nati, New  Orleans  and  St.  Louis ;  while  the  smaller  notes 
penetrate  the  country  whose  commerce  flows  naturally  to 
these  several  centers  of  trade. 

260.  The  notes  of  commercial  banks  appropriately  circu- 
late throughout  the  region  of  country  sustaining  commercial 
relations  to  the  city  or  commercial  center  where  such  banks 
are  located,  and  either  buying  thereof  or  selling  thereto.     If 
New  York,  for  example,  buys  flour  of  Michigan  and  Illinois, 
it  affords  a  reason  for  the  circulation  of  New  York  money  in 
these  states.     But  if  Georgia  and  Tennessee  sell  nothing  to 
Wisconsin,  there  can  be  no  reason  why  Wisconsin  money 
should  circulate  in  those  states.     So,  also,  if  Wisconsin  sells 
nothing  to  them,  there  can  be  no  reason  why  their  money 
should  circulate  in  the  latter  state. 

STATE   BANKS. 

261.  In  a  general  sense  all  banks  that  are  established  by 
authority  of  State  Legislatures  may  be  regarded  as   State 
Banks.     But  the  term  as  here  introduced  is  employed  in  a 
restricted  sense.     State  Banks,  then,  are  banks  authorized  by 
the  legislatures  of  the  states  in  which  they  are  situated,  and 
designed   more  especially  to  afford  a  convenient  and  safe 
currency  for  use  in  the  states  where  they  are  respectively 
located.     For  the  purposes  of  trade  within  the  state  in  which 
such  banks  are  situated,  their  bills,  when  properly  secured 
and  easily  converted  into  specie,  are  more  desirable  than  the 
specie,  or  the  bills  of  foreign  commercial  banks. 

QUEST.  259.  For  what  are  the  larger  notes  and  drafts  used?  —  260.  Where  do 
the  notes 'of  commercial  banks  properly  circulate  ?  Illustrate  by  an  example,  show- 
ing where  the  money  of  a  state  may  properly  circulate,  and  where  it  may  not.  — 
261.  What  are  State  Banks,  in  a  general  sense?  What  are  State  Banks,  in  a  re- 
stricted sense?  What  is  remarked  of  their  bills  for  purposes  of  trade  within  the  state 
in  which  such  banks  are  situated  ? 

168 


PRIVATE   BANKS. 


262.  The  bills  of  State  Banks  afford  the  best  possible 
currency  for  all  ordinary  exchanges  within  the  state,  when 
such  banks  are  located  at  accessible  points,  and  redeem  their 
bills  in  specie  promptly  on  presentation.     They  are  objec- 
tionable only  when  located  at  remote  and  inaccessible  points, 
or  when  there  is  inconvenience,  uncertainty,  or  delay  in  pro- 
curing the  redemption  of  their  notes  in  specie. 

PRIVATE  BANKS. 

263.  Private  Banks  are  banks  established  by  individuals, 
and  usually  under  a  general  provision  of  law.     They  afford 
facilities  for  the  safe-keeping  of  money,  and  for  conducting 
exchanges,  similar  to  those  of  incorporated  banks,  and  like 
them  they  receive  moneys  on  notes  or  drafts  payable  at  their 
counters,  and  remit  the  same,  or  their  drafts  therefor,  to  their 
correspondents,  when  notes  and  drafts  have  been  forwarded 
to  them  for  collection  and  transmission  of  payment. 

264.  Private  Banks,  like  Commmercial  and  State  Banks, 
are  usually  banks  of  deposit  and  exchange.     They  generally, 
like  other  banks,  discount  paper  according  to  their  ability  and 
the  wants  of  their  customers ;  but  they  are  not  authorized  to 
issue  and  circulate  their  own  notes  as  currency,  unless  they 
furnish  security  for  the  redemption  of  their  issues,  as  required 
in  the  case  of  other  banks.     (Art.  255.) 

RECAPITULATION. 

265.  We  have  seen  that  men  generally  are  at  liberty  to 
select  any  employments  which  they  may  pursue  with  advan- 
tage to  themselves  and  with  benefit  to  the  community  in  which 
they  live ;  but  that  no  person  has  a  right  to  do  that  which 
works  ill  to  his  neighbor,  and  violates  the  law  of  reciprocity. 

QUEST.  262.  When  are  their  bills  fhebest  currency,  and  when,  only,  are  they  objec- 
tionable?—263.  What  are  Private  Banks?     How  are  they  useful ?  — 264.  What 
other  functions  do  they  perform  ?     Do  they  issue  their  own  notes  as  currency?  — 
265.  What  employments  are  men  at  liberty  to  select,  and  what  have  they  no  right  to  do? 
15  169 


GENERAL    BOOK-KEEPING. 


266.  We  have  seen  that  labor  is  the  source  of  wealth ', 
that  each  man,  while  obeying  the  law  of  reciprocity,  has  ex- 
clusive right  to  the  fruits  of  his  industry ;  that  the  wages  of 
the  laborer  will  depend  upon  his  industry,  his  intelligence,  his 
skill,  and  his  moral  character  ;  that  men  should  at  all  events 
do  something,  and  that  it  is  their  privilege  to  devote  them- 
selves to  the  highest  and  most  productive  forms  of  industry 
for  which  they  have  an  aptitude,  and  the  necessary  skill  and 
trustworthiness,  wherever  there  is  a  demand  for  such  labor ; 
that  each  man  is  under  obligation  to  render  to  society  an 
equivalent  for  the  benefits  he  receives,  in  such  form  as  he 
may  be  able ;  that  it  is  a  law  of  the  Creator,  If  any  man  witt 
not  work  neither  shall  he  eat ;  and  that  the  laborer  and  the 
capitalist  are  mutually  interested  in  each  other's  well  being. 

267.  We  have  seen  that,  in  order  to  render  labor  most 
productive,  each  man  engages  in  producing  much  of  one,  or 
at  most  of  a  few  things,  while  every  man's  happiness  is  pro- 
moted by  the  possession  and  use  of  a  thousand  products  ;  that 
each  and  every  one  can  hence  gratify  more  innocent  desires, 
and  enjoy  more  happiness,  by  a  mutual  exchange  of  surplus 
products ;  and  that  merchants  and  money  contribute  to  the 
rapidity,  frequency,  and  cheapness  of  exchanges,  and  hence 
to  the  general  prosperity  of  the  entire  community.     And 
beyond  this,  we  have  seen  how  Banks  are  useful  to  society  for 
the  safe-keeping  of  money ;  in  the  diminution  of  crime ;  as 
offering  facilities  for  exchanges,  domestic   and   foreign,  on 
terms  beneficial  to  every  one ;  how  they  benefit  the  borrower 
and  the  lender ;  how  they  unite  and  benefit  both  labor  and 
capital ;  and  how  they,  in  various  other  ways,  advance  the 
welfare  of  society,  and  aid  in  effecting  exchanges. 

QUEST.  266.  What  is  said  of  labor,  rights,  and  wages?  Should  every  man  d» 
xmeihing?  To  what  forms  of  industry  may  persons  devote  themselves?  What 
should  every  one  render  to  society  ?  What  law  of  the  Creator  is  stated  ?  What  of  the 
laborer  and  the  capitalist  ?  —  267.  How  is  labor  rendered  most  productive,  and  how 
is  every  man's  happiness  promoted?  What  of  exchanges?  What  of  merchants  and 
money?  How  are  banks  useful  to  society?  What  is  their  effect  upon  borrower  and 
lender  ?  What  their  effect  upon  labor  and  capital  ? 

170 


RECAPITULATION. 


268.  The  study   and   practice   of  Book-keeping  would 
greatly  promote  the  public  good,  by  facilitating  exchanges,  and 
in  diminishing  the  amount  of  the  circulating  medium  that 
would  otherwise  be  necessary  therefor.     The  machinery  of 
civil  society  would  be  thus  more  economically  carried  on,  and 
from  the  numerous  checks  that  would  in  this  way  be  thrown 
about  individuals  in  their  public  and  private  intercourse,  the 
temptations  to  dishonesty  would  be  diminished,  and  the  prin- 
ciples of  integrity  strengthened. 

269.  While  we  have  remarked  upon  the  circumstance  and 
conditions  that  contribute  to  success  in  business,  and  to  the 
welfare  of  the  community  at  large,  the  causes  of  want  of  pros- 
perity can  hardly  fail  to  be  manifest.     Whenever  any  of  the 
conditions  that  have  been  mentioned  as  essential  to  success, 
are  violated  or  disregarded  in  any  community,  then  will  the 
prosperity  of  individuals  in  that  community,  and  of  the  whole 
community,  decline  in  proportion.     There  is,  and  can  be,  no 
royal  road  to  riches.    Wealth,  or  a  moderate  competence 
even,  is  generally  attainable  only  as  the  fruit  of  long  and 
well-directed  industry.     Wherever  consumption  exceeds  pro- 
duction, there  must  abundance  and  happiness,  less  or  more 
rapidly,  give  place  to  poverty  and  misery.     Men  may,  for  a 
time,  seem  to  be  prosperous  while  violating  the  law  of  reci- 
procity.    But  real  prosperity,  and  enduring  good,  are  attain- 
able only  by  the  active  employment  of  our  faculties  in  har- 
mony with  the  established  laws  of  the  Creator. 

QUEST.  268.  What  would  be  the  effect  of  the  general  study  and  practice  of  Book- 
keeping ?  How  would  it  affect  the  amount  of  circulating  medium  required  ?  What 
of  its  "  checks"  upon  individuals?  —  269.  When  will  the  .prosperity  of  individuals, 
and  of  a  community  decline  ?  Is  there  any  royal  road  to  riches  ?  How,  only,  ii 
wealth,  or  a  competence,  attainable  ?  What  will  result  when  consumption  exceed! 
production.?  What  is  said  of  seeming  and  real  prosperity? 

171 


PART    FOURTH. 

DOUBLE  ENTRY  BOOK-KEEPING. 


ART.  270.  DOUBLE  ENTRY  is  a  system  of  Book-keeping 
in  which  every  transaction  is  twice  entered;  first  on  the  Dr. 
side  of  one  or  more  accounts,  and  then  on  the  Cr.  side  of  one 
or  more  other  accounts,  to  which  it  also  belongs.  It  is  from 
this  circumstance  that  it  derives  its  name.  Double  Entry  is 
especially  adapted  to  the  wants  of  persons  engaged  in  a  whole- 
sale trade,  or  in  any  business  which  is  complicated. 

271.  In    Double    Entry    Book-keeping   three    principal 
books  have  generally  been  employed,  viz.:  a  Day  Book,  a 
Journal,  and  a  Ledger.     But  many  of  our  best  book-keepers 
now  dispense  with  the  use  of  one  of  these  books,  by  com- 
bining all  that  is  essential  of  two,  in  one,  and  thereby  save  to 
themselves  much  time  and  labor  in  writing.     A  set  of  books 
should  contain  a  distinct  and  systematic  record  of   all  we 
wish  or  need  to  know  about  our  business.     That  is  the  best 
system  of  Book-keeping  which  is  most  easily  kept,  which 
enables  us  most  readily  and  certainly  to  know  the  exact  state 
of  our  affairs,  and  which  is  most  intelligible  to  others. 

272.  In  this  treatise  the  Journal  and  Ledger,  only,  are 
used  as  principal  books.     The  Transactions  in  the  Examples 
for  Practice  contain  the  information  usually  given  in  the  Day 
Book.     References  are  made  in  the  Journal,  when  necessary, 
showing  where  sums  entered  may  be  found,  and  on  what 


QUEST.  270.  What  is  Double  Entry  Book-keeping?  To  whose  wants  is  it  especially 
adapted  ?  —  271.  How  many  principal  books  are  generally  kept  in  double  entry,  and 
what  are  they  ?  With  what  do  many  of  our  best  book-keepers  dispense  ?  What 
should  a  set  of  books  contain  ?  What  is  the  best  system  of  Book-keeping  ?  —  272.  In 
this  treatise  what  books  only  are  used?  What  references  are  made  in  the  Journal? 

172 


DEFINITION    OF    BOOKS. 


accounts  they  have  been  received  or  paid.     These  references 
are  generally  made  either  to  the  Invoice  Book,  (see  entries  * 

2,  6,  and  8,  of  Journal  A,)  or  to  the  Sales  Book,  (see  entries 

3,  4,  5,  etc.)     When  not  to  one  of  these,  the  nature  of  the 
transaction  will  suggest  the  proper  reference  phrase. 

DEFINITION  OF  BOOKS. 

273.  The  INVOICE  BOOK  is  a  book  in  which  are  entered 
at  length  all  Invoices,  or  bills  of  goods  purchased.     It  may  be 
made  by  copying  invoices  into  a  blank  book,  or  by  pasting 
the  original  invoices    into  a  book  made  for  that  purpose. 
When  invoices  are  numbered  and  placed  on  file,  as  recom- 
mended in  Art.  156,  they  may  be  referred  to  by  number. 

274.  The  SALES  BOOK  is  a  book  in  which  are  entered 
at  length  all  bills  of  Mdse.  sold.     (Art.  157.) 

275.  The  JOURNAL  either   contains  the  particulars  of 
every  business  transaction,  or  it  makes  special  reference  to 
the  name  and  page  of  the  book  in  which  they  may  be  found, 
or  if  to  papers  on  file,  to  their  title  and  number.     In  it  the 
entries  are  so  recorded  that  they  may  be  readily  posted  to 
their  proper  accounts  in  the  Ledger.     It  is  ruled  like  the 
Day  Book  in  the  Third  Form  of  Accounts,  but  is  used  dif- 
ferently.    The   Dr.   sums  are   all  entered  in  the  left-hand 
columns,  and  the  Cr.  sums  in  the  right-hand  columns. 

276.  In  case  there  are  several  Dr.  items  in  an  entry,  to 
be  posted  to  as  many  different  accounts,  their  sum  will  exactly 
equal  the  sum  of  the  Cr.  items.     In  such  cases  it  is  customary 

*  By  referring  to  'the  entries  in  the  Journal  it  will  be  seen  that  they  are  numbered 
tn  full-faced  figures.  This  has  been  done  in  order  to  facilitate  the  reference  to  par- 
ticular entries  in  giving  explanations  of  the  mode  of  making  the  Journal  entries,  of 
posting  them  to  their  proper  accounts  in  the  Ledger,  and  of  balancing  the  accounts. 

QUEST.  272.  To  what  books  are  these  references  generally  made  ?  —  273.  What 
is  the  Invoice  Book?  How  may  it  be  made?  When  invoices  are  numbered  and  placed 
on  file,  how  may  they  be  referred  to  ?  —  274.  What  is  the  Sales  Book  ?  —  275.  What 
does  the  Journal  contain?  How  are  the  entries  recorded  in  it?  How  is  it  ruled ? 
Where  are  the  Dr.  sums  entered,  and  where  the  Cr.  sums?  —  276.  When  there»are 
several  Dr.  items  in  an  entry  to  be  posted  to  as  many  different  accounts,  what  will  their 
Bum  exactly  equal  ? 

15*  173 


DOUBLE    ENTRY   BOOK-KEEPING. 


to  use  the  word  "Sundries"  before  the  several  particular! 
that  are  entered  at  the  Dr.  side  of  the  account,  as  in  entries 
1  and  6  of  Journal  A.  In  entries  2  and  11  the  reverse  is 
true,  the  Dr.  entries  being  posted  to  one  account,  and  the  Cr. 
entries  each  to  sundry  accounts.  The  word  "  Sundries,"  how- 
ever, in  such  cases,  although  sometimes  employed,  is  not  used 
in  the  annexed  Journal,  nor  is  it  uniformly  employed  in  Dr. 
entries.  The  fact  of  there  being  "Sundries"  is  apparent, 
whether  the  word  is  employed  or  not. 

277.  In  all  cases  the  Dr.  amount  posted  from  an  entry, 
whether  to  one  or  more  accounts,  should  exactly  equal  the 
Cr.  amount.     The  general  principle  is  beautifully  illustrated 
In  the  symbol  of  a  pair  of  scales  on  the  title-page  of  the  Book- 
keeping, referred  to  in  Art.  38.     The  Symbol  on  the  title- 
page  of  the  Account  Books  particularly  illustrates  entry  1, 
Journal  A.     (Page  188.) 

278.  When  a  page  of  the  Journal  has  been  written  up, 
the  money  columns  should  be  footed,  and  in  case  the  Dr.  and 
Cr.  amounts  exactly  agree,  the  Inference  is  that  the  sums 
have  been  correctly  entered.     If  they  disagree,  it  is  certain  a 
mistake  has  been  made.     The  work  should  then  be  carefully 
reviewed,  and  all  errors  corrected,  as  directed  in  Art.  130. 

279.  RULES  FOR   JOURNALIZING.     In  writing   up   the 
Journal,  the  principles  already  elucidated  for  Debtor  arid 
Creditor  are  applicable.     (Arts.  16  to  27.)     But  the  usual 
Dr.  and  Cr.  signs  are  omitted.     The  word  "  To,"  as  employed 
in  the  Journal,  indicates  that  the  titles  of  accounts  preceding 
it  are  Dr.,  and  those  following  it  Cr.     Of  the"  many  rules  for 
Journalizing  that  might  be  given,  none,  perhaps,  are  superior 

QUEST.  276.  What  of  the  word  "  Sundries  "  in  such  cases  ?  When  there  is  one  Dr. 
sum  in  an  entry,  and  several  Cr.  items  to  be  posted  against  it,  is  the  word  "  Sun- 
dries "  then  used  ?  What/ac*  is  apparent  ?  —  277.  To  what  is  the  Dr.  amount  posted 
from  an  entry  in  all  cases  equal  ?  What  symbol  illustrates  the  general  principle  ? 
What  symbol  particularly  illustrates  the  first  entry  in  the  Journal?  —  278.  How 
may  you  determine  whether  the  Journal  entries  on  a  page  have  been  correctly  made? 
When,  is  it  certain  a  mistake  has  been  made?  —  279.  What  is  said  of  Debtor  and 
greditor,  and  the  word  To  f 

174 


CLASSES    OF   ACCOUNTS. 


to  the  following,  which  may  be  the  better  remembered  foi 
being  expressed  in  homely  verse. 

"  By  Journal  laws  what  you  receive 
Is  Debtor  made  to  what  you  give. 
Stock  for  your  debts  must  Debtor  be, 
And  Creditor  for  property. 
Profit  and  Loss  Accounts  are  plain ; 
You  debit  Loss  and  credit  Gain." 

280.  The  LEDGER  in  Double  Entry  Book-keeping,  like 
that  already  described,  is  a  book  to  which  the  entries  recorded 
in  the  Journal  are  transferred  and  so  arranged  as  to  present 
each  account  on  a  folio  by  itself.     The  instructions  given  in 
relation  to  the  Ledger,  and  to  Posting  Books  (Arts.  122  to 
130)  are  applicable  here.     The  letter    £9  in  the  Ledger, 
stands  for  Journal. 

CLASSES  OF  ACCOUNTS. 

281 .  The  accounts  in  a  merchant's  Ledger  may  be  classi- 
fied under  the  three  following  heads,  —  Real  Accounts,  Per- 
ional  Accounts,  and  Imaginary  Accounts. 

282.  REAL  ACCOUNTS  include  all  accounts  of  effects  or 
things  which  a  person  possesses.     Of  this  class  are  the  Cash 
Account  and  the  Merchandise  Account.     To  these  may  be 
added  the  accounts  kept  in  the  First  and  Second  Forms  of 
Account,  other  than  accounts  with  persons ;  such  as  the  Corn- 
field Account,  the  Beef  Account,  and  the  Sheep  and  "Wool 
Account ;  also  the  Stone  Mill,  and  Wagon  Shop  Accounts  in 
the  following  Examples  for  Practice. 

283.  PERSONAL  ACCOUNTS  are  the  accounts  kept  with 
different  persons  with  whom  we  transact  business. 

284.  IMAGINARY  ACCOUNTS  are  fictitious  titles  invented 
to  represent  the  person  or  company  that  conduct  a  business, 

QCEST.  279.  Give  rule  for  Journalizing.  —  28O.  What  is  the  Ledger?  For  what 
does  ./stand  ?  —  281.  Under  how  many  heads  may  the  accounts  in  a  merchant's  Ledger 
be  classified,  and  what  are  they?  —  282.  What  are  Real  Accounts?  Mention  some 
accounts  of  this  class.  — 283.  What  are  Personal  Accounts  ?—  284.  What  are 
Imaginary  Accounts?  175 


DOUBLE    ENTRY   BOOK-KEEPING. 


or  to  supply  the  want  of  some  real  or  personal  titles  in  re- 
cording such  gains  or  losses  as  cannot  with  propriety  be 
placed  to  Real  or  Personal  Accounts.  Of  this  class  are 
Stock,  Profit  and  Loss,  Expense,  and  Interest  Accounts. 

TITLES  OF  ACCOUNTS. 

285.  The   STOCK  ACCOUNT   represents  the  person  01 
company  that  conduct  a  business.     On  the  Dr.  side  of  this 
account  are  entered  all  the  sums  they  owe  on  commencing 
business,  and  on  the  Cr.  side,  the  amount  of  money  and  the 
value  of  property  they  carry  into  business.     The  excess  of 
the  credits  over  the  debits  will  be  the  net  amount  of  property 
invested  in  trade. 

286.  The  MERCHANDISE  ACCOUNT  shows  how  much 
has  been  paid  for  Merchandise,  and  how  mueh  it  has  been 
sold  for.     On  the  Dr.  side  of  this  account  are  entered  the 
value  of  all  the  Merchandise  on  hand  at  the  time  of  com- 
mencing business,  and  the  amounts  paid  for  all  subsequent 
purchases.     On  the  Cr.  side  of  the  account  are  entered  the 
amounts  of  all  sales.     In  case  the  Merchandise  is  all  sold, 
the  difference  between  the   Dr.  and  the   Cr.  sides  of  the 
account  will  exhibit  the  gross  gain  or  loss  on  Merchandise. 
If  any  goods  remain  unsold,  their  value  should  be  ascertained 
by  taking  an  inventory  of  them,  and  then  be  entered  on  the 
Cr.  side  of  the  account.     The  mode  of  doing  this  and  of 
ascertaining  the  gross  profit  in  trade,  and  finally  the  net  gain, 
IB  shown  under  the  head  of  Balancing  Accounts.     (Art.  296.) 

287.  The   EXPENSE   ACCOUNT  includes  all  sums  that 
have  been  paid  for  carrying  on  one's  business  ;  such  as  freight, 
clerk  hire,  store  rent,  etc.     All  such  expenses  should  be  en- 

QUEST.  284.  Mention  some  accounts  of  this  class.  —  285.  What  does  the  Stock 
Account  represent  ?  What  sums  are  entered  on  the  Dr.  and  what  on  the  Cr.  side  of 
this  account  ?  How  do  we  arrive  at  the  net  amount  of  property  invested  in  trade  ?  — 
286.  What  does  the  Merchandise  Account  show?  What  entries  are  made  on  th« 
Dr.  and  what  on  the  Cr.  side  of  this  account  ?  How  is  the  gain  or  loss  on  Merchandise 
ascertained  ?  —  287.  What  *>es  the  Expense  Account  include  ? 

176 


POSTING   BOOKS. 


tered  on  the  Dr.  side  of  this  account.  The  Cr.  side  of  thia 
account  contains  nothing  until  the  closing  of  the  books.  The 
sum  necessary  to  balance  the  account  is  then  entered  on  the 
Cr.  side,  the  same  amount  being  likewise  entered  on  the  Dr 
side  of  the  Profit  and  Loss  Account,  as  is  fully  explained 
under  the  head  of  Balancing  Accounts.  (Art.  296.) 

288.  The  CASH  ACCOUNT  exhibits  the  receipts  and  dis« 
bursements  of  Cash,  including  specie  and  bank  notes.     In  it 
may  also  be  entered  certificates  of  deposit,  checks,  and  drafts, 
which  are  the  representatives  of  Cash.     (Art.  45.) 

289.  The  PROFIT  AND  Loss  ACCOUNT,  as  its  title  im- 
plies, is  kept  to  show  the  Profits  and  Losses  in  one's  business. 
On  the  Dr.  side  of  this  account  are  entered  all  losses  sustained, 
and  all  moneys  paid  for  labor,  taxes,  etc.,  which  do  not  belong 
more  properly  to  other  accounts,  including  the  sum  necessary 
to  balance  the  Expense  Account.     On  the  Cr.  side  are  en- 
tered all  gains  of  whatever  kind  arising  from  one's  business. 

290.  On  closing  this  account,  if  the  sum  of  the  Cr.  entries 
is  greater  than  that  of  the  Dr.  entries,  the  difference  will  be 
the  amount  of  Profit  that  has  arisen  f^pm  the  business ;  but 
if  it  is  less,  it  will  exhibit  the  amount  of  Loss  sustained. 

291.  The  BALANCE  ACCOUNT  is  the  title  of  an  account 
sometimes  employed  for  the  purpose  of  balancing  unclosed 
accounts ;  hence  its  name.     In  this  work  the  Ledger  Balances 
are  obtained  without  the  use  of  this  account. 

POSTING  BOOKS. 

292.  The  instructions  for  Posting  Books,  given  in  Arts. 
127  to  132,  are  applicable  here.     Every  sum  entered  in  the 


QUEST.  287.  On  which  side  of  the  account  are  all  expenses  entered?  What  does 
the  Cr.  side  of  this  account  contain  ?  —  288.  What  does  the  Cash  Account  exhibit? 
What  may  be  entered  in  it  ?  —  289.  For  what  purpose  is  the  Profit  and  Loss  Account 
kept  ?  What  entries  are  made  on  the  Dr.  and  what  on  the  Cr.  side  of  this  account?  — 
290.  When  does  this  account  represent  that  a  Profit  has  arisen  in  business,  and 
when  that  a  Loss  has  been  sustained  ?  —291.  What  is  the  Balance  Acer  ant  1  Is  thU 
Account  opened  in  the  Ledger  ? 

177 


DOUBLE    ENTRY   BOOK-KEEPING. 


Dr.  columns  of  the  Journal  is  posted  into  the  Ledger  to  the 
Dr.  side  of  the  account  opposite  which  it  stands  in  the  Jour- 
nal ;  and  every  sum  entered  in  the  Cr.  columns  of  the  Journal 
is  posted  to  the  Cr.  side  of  the  account  opposite  whose  title  it 
stands.  The  reference  figures  from  the  page  of  each  book  to 
the  page  of  the  other,  are  entered  according  to  the  instructions 
already  referred  to.  The  Journal  page  is  entered  in  the 
Ledger  at  the  left  of  the  money  columns  into  which  the  sum 
has  been  posted,  and  the  Ledger  page  is  entered  in  the  Jour- 
nal opposite  the  title  of  the  account  that  has  been  posted. 

293.  The  seventeen  Transactions  of  the  following  Illus- 
trative Example  give  rise  to  the   first   seventeen   Journal 
entries,  numbered  1  to  17  inclusive.     When  the  student  is 
able  to  journalize  these  transactions  without  referring  to  the 
Journal  for  assistance,  he  may  post  the  entries  to  the  Ledger. 
Having  carefully  reviewed  his  postings  to  entry  17  inclusive, 
a  Trial  Balance  should  be  taken. 

TRIAL  BALANCE. 

294.  We  have  Already  shown  how  errors  may  be  de- 
tected in  Journal  entries  by  adding  the  sums  in  the  money 
columns.     (Art.  278.)     The  Trial  Balance,  which  is  taken 
for  the  purpose  of  ascertaining  whether  the  Journal  entries 
have  been  correctly  transferred  to  the  Ledger,  as  well  as  to 
prepare  the  way  for  balancing  unclosed  accounts,  affords  a 
similar  test  of  the  accuracy  of  postings.     Neither  test,  how- 
ever, is  infallible ;  for  although  right  sums  may  be  entered, 
and  in  the  right  columns,  still  they  may  be  entered  to  wrong 
accounts.     Hence  the  necessity  for  constantly  exercising  great 
care  in  writing  up  all  your  books. 

QUEST.  292.  How  are  entries  posted  from  the  Journal  to  the  Ledger?  — 293. 
How  many  Transactions  are  there  in  the  Illustrative  Example,  and  to  how  many 
Journal  entries  do  they  give  rise?  When  may  the  entries  be  posted  to  the  Ledger? 
When  should  the  Trial  Balance  be  taken?  —  294.  For  what  purpose  is  it  taken? 
Why  are  not  the  proof  testa  of  adding  the  money  columns  of  the  Journal  and  the 
Vedger  infallible  ? 

178 


BALANCING   ACCOUNTS. 


295.  The  Trial  Balance  is  taken  as  follows :   First,  mis 
a  sheet  of  paper  as  is  done  in  case  of  the  Trial  Balance  given 
at  the  204th  page.     Then  the  two  sides  of  every  account  in 
the  Ledger  should  be  added,  and  the  less  amount  subtracted 
from  the   greater.     All  those  accounts  which  will  exactly 
balance  should  be  ruled  off  and  closed  at  once.     This  done, 
the  titles  to  all  our  unclosed   accounts,  and  the  difference 
between  the  footings  of  the  two  sides  of  each  account  in  the 
Ledger,  should  be  entered  in  the  Trial  Balance,  on  the  Dr. 
side  when  there  is  a  debit  excess  in  the  Ledger  account,  and 
on  the  Cr.  side  when  there  is  a  credit  excess.     Then,  as  the 
sum  of  all  the  debit  entries  posted  into  the  Ledger  is  exactly 
equal  to  the  sum  of  all  the  credit  entries  thus  posted,  and  as 
we  have  only  left  off  from  the  Trial  Balance  those  accounts 
that  exactly  balance,  it  is  apparent  that  the  sum  of  all  the 
entries  in  the  Dr.  columns  of  the  Trial  Balance  should  ex- 
actly agree  with  the  sum  of  all  the  entries  in  the  Cr.  columns 
The  sums  in  these  columns  should  next  be  added.     In  case 
the  footings  agree,  the  inference  is  that  the  Journal  entries 
have  been  correctly  posted  into  the  Ledger.     If  they  disagree, 
it  is  certain  a  mistake  has  been  made,  and  the  work  should 
be  reviewed. 

BALANCING  ACCOUNTS. 

296.  Balancing  Accounts  is  a  systematic  closing  of  the 
Ledger  Accounts  in  order  to  determine  whether,  on  the  whole, 
there  has  been  gain  or  loss  in  trade,  how  much,  and  how  it 
has  arisen.     In  the  following  Illustrative  Example  the  only 
Bource  of  gain  is  from  the  sale  of  Merchandise.     In  case 
Mdse.  has  been  sold  for  more  than  it  cost  and  the  expenses 
incurred  in  carrying  on  the  business,  there  has  been  gain  in 
trade ;  but  if  sold  for  less  than  its  cost  and  expenses  of  carry- 
ing on  the  business,  there  has  been  loss. 

QUEST.  295.  Describe  at  length  the  mode  of  taking  the  Trial  Balance.  —  298. 
What  is  Balancing  Accounts?  What  is  the  only  source  of  gain  in  the  Illustrative 
Example  ?  How  do  we  determine  whether,  on  the  whole,  there  has  been  gain  of 
loss  in  trade  ? 

179 


DOUBLE    ENTRY   BOOK-KEEPING. 

297.  Every  entry  that  has  appeared  in  any  Ledger  Ao» 
count  to  the  date  of  the  17th  and  last  transaction  recorded, 
January  30th,  has  been  posted  from  the  Journal.     But  under 
date  of  January  31st  there  are  several  Ledger  entries,  some 
of  which  have  been  posted  from  the  Journal,  while  others 
have  a  different  origin.     We  will  see  how  these  have  arisen. 

298.  An  Inventory  of  Mdse.  on  hand  is  taken  January 
31st,  when  we  proceed  to  balance  the  unclosed  accounts. 

The   Inventory   in   the   Illustrative   Example   employed, 
(Art.  310,  p.  187,)  shows  that 

We  have  on  hand  Mdse.  to  the  value  of  .  .  $1471.00 
We  have  sold,  as  per  Cr.  side  of  Mdse.  Acct.,  9233.60 
Total  Cr.  to  Merchandise  Account,  ....  10704.60 
We  have  paid  for  Mdse.  to  Jan.  30th,  .  .  .  9815.00 
Balance  of  Mdse.  Acct.,  Gross  Pro/its,  .  .  $889.60 

299.  We  are  now  prepared  to  close  the  Merchandise 
Account,  which  is  done  as  follows :   January  31st,  we  credit 
Mdse.  for  the  amount  on  hand  as  per  Inventory.     This  entry, 
which  is  made  in  the  Ledger  in  Roman  letters  and  figures,  and 
which  is  frequently  entered  by  the  book-keeper  in  red  ink,  is 
not  brought  from  the  Journal,  but  is  entered  as  an  amount  on 
hand  to  the  credit  of  Merchandise  to  be  brought  down  as  a 
Balance.     (Arts.  46  and  303.) 

300.  The  Merchandise   Account   now  contains  on  the 
Dr.  side  all  we  have  paid  for  Merchandise,  and  on  the  Cr. 
side  all  we  have  received  for  Mdse.,  together  with  the  value 
of  that  on  hand.     The  Cr.  excess  must  be  our  gross  profits  in 
trade.     Having  made  the  calculation  in  Art.  298,  we  are  pre- 
pared to  close  the  Merchandise  Account  into  Profit  and  Loss, 


QUEST.  297.  Do  any  entries  except  those  posted  from  the  Journal  appear  in  the 
Ledger  previous  to  taking  the  Trial  Balance  ?  —  298.  What  is  done  before  proceed- 
ing to  balance  the  unclosed  accounts  of  the  Ledger?  What  is  Mdse.  on  hand  inven- 
toried at  in  the  present  case,  and  how  do  we  determine  the  gross  profits  in  trade  ?  — 
299.  In  closing  Merchandise  Account  what  entry  is  made  for  Mdse.  on  hand  as  per 
Inventory  ?  How  is  the  entry  made  ?  —  300.  How  is  Merchandise  Account  closed 
fer  aross  profits  in  trade  ? 

180 


BALANCING   ACCOUNTS. 


which  is  done  in  entry  18  of  the  Journal.  This  entry  posted, 
closes  the  Ledger  account  with  Merchandise,  and  opens  an 
account  with  Profit  and  Loss. 

301.  All  expenses  that  have  been  incurred  in  carrying  on 
the  business  have  been  posted  to  the  Dr.  side  of  the  Expense 
Account.     We  are  now,  therefore,  prepared  to  make  Journal 
entry  19,  which,  when  posted,  closes  the  Ledger  account  with 
Expenses,  and  places  an  equal  amount  to  the  debit  of  Profit 
and  Loss. 

302.  Now,  on  the  Dr.  side  of  Profit  and  Loss,  we  have 
brought  all  the  expenses  incurred  in  carrying  on  the  business ; 
and  on  the  Cr.  side  of  this  account  appear  the  gross  profits 
that  have  arisen  in  trade.     The  excess  of  the  latter  over  the 
former  it  is  evident  will  be  the  net  gain.     We  then  make 
Journal  entry  30,  which,  when  posted,  closes  the  Profit  and 
Loss  account,  and  carries  the  net  gain  in  trade  to  the  credit 
of  Stock.     We  have  thus  closed  all  accounts  that  affect  gain 
or  loss  in  trade,  into  Profit  and  Loss,  which  we  have  closed 
into  Stock. 

303.  We  now  proceed  to  close  Merchandise,  (for  Balance 
on  hand  as  per  Inventory,)  Cash,  unsettled  Personal  Accounts, 
and  Stock,  into  Ledger  Balances,  of  which  the  Dr.  exhibit  our 
Assets,  and  the  Cr.  our  Net  Stock  and  Liabilities.     Balances 
should  be  taken  from  the  Ledger  at  the  close  of  each  month, 
and  be  brought  together  in  a  Book  of  Balances.     The  condi- 
tion and  history  of  each  account,  and  of  all  the  accounts  of 
the  Ledger,  may  then  foe  seen  at  a  glance.     The  merchant 
has  thus  before  him  a  synopsis  of  his  entire  business,  with 
its  monthly  changes  and  variations,  together  with  a  proof  of 
the  accuracy  of  his  postings  and  Ledger  Balances. 

304.  We  have  thus  far  shown  the  order  of  closing  the 


QUEST.  301.   How  do  we  close  Expense  Account  ?  —  302.  What  is  the  condition 
of  Profit  and  Loss  acct.  and  how  do  we  close  it?  —  303.  What  accounts  are  closed 
into  Ledger  I&iances,  and  what  do  these  balances  represent  ?    What  is  said  of  a  Book 
•f  Balances,  and  what  advantages  result  from  its  use  ? 
16  151 


DOUBLE    ENTRY  BOOK-KEEPING. 


Ledger  Accounts,  as  applied  to  the  following  Illustrative 
'Example.  The  same  principles  are  of  general  application, 
as  is  beautifully  illustrated  in  the  Diagram  on  the  opposite 
page.  Merchandise  and  Expenses  we  have  closed  into  Profit 
and  Loss.  (Arts.  300  and  301.)  The  several  departments 
of  Agriculture  and  branches  of  Manufactures  and  Commerce, 
together  with  Interest,  Discount,  Exchange,  and  all  other 
accounts  indicating  gain  or  loss  in  business,  in  like  manner 
close  into  Profit  and  Loss.  And  however  numerous  these 
accounts  may  be,  they  can  all  be  closed  by  two  Journal 
entries,  as  indicated  in  the  following  article. 

305.  Select  from  the  Ledger  all  accounts  that  indicate 
gain  or  loss  in  trade.     Take  those  in  which  the  sum  of  the 
Cr.  entries  exceeds  that  of  the  Dr.  entries,  and  make  them 
Dr.  in  the  sums  necessary  to  balance  them  severally,  and 
pass  the  amount  of  the  whole  to  the  Cr.  of  Profit  and  Loss. 
Now  take  the  remaining  Ledger  accounts  of  this  class,  in 
which  the  sum  of  the   Dr.  entries  exceeds  that  of  the  Cr, 
entries,  and  make  Profit  and  Loss  Dr.  to  these  accounts  lit 
an  amount  sufficient  to  balance  them  severally.     Profit  and 
Loss  having  thus  served  us  by  closing  all  accounts  that  indi- 
cate gain  or  loss  in  trade,  we  next  close  it  into  Stock,  which 
is  the  third  and  last  Journal  entry  in  Balancing. 

306.  In  the  Examples  for  Practice  commencing  on  the 
198th  page,  after  journalizing  the  60  transactions  there  given, 
the  61st  Journal  entry  will  be  as  follows:    Sundries  Dr.,— 
Merchandise,  Interest,  Stone  Mill,  and  Wagon  Shop,  —  in 
amounts  to  balance  them  severally,  to  Profit  and  Loss.     But 
no  particular  rules  can  be  given  that  shall  exactly  meet  everj 
case.     The  exercise  of  judgment  is  therefore  necessary. 

QUEST.  304.  Arc  these  principles  of  general  application  in  closing  accounts  r 
How  many  Journal  entries  will  close  all  accounts  indicating  gain  or  loss  in  trade  inta 
Profit  and  Loss  ?  Explain  the  Diagram.  —  305.  Explain  the  mode  of  making  thesi 
closing  entries.  How  is  Profit  and  Loss  itself  closed  ?  —  306.  (The  student  may 
consult  this  paragraph  after  journalizing  the  60  transactions.)  What  is  said  of  par- 
ticular rules,  and  what  of  the  exercise  of  the  judgment  in  journalizing? 

182 


MODE  OF  CLOSING  THE  LEDGER. 


DIAGRAM  FOR   CLOSING   LEDGER. 


CLOSE    INTO 


PROFIT  AND  LOSS,  CL.STNTO  STOCK. 


183 


DOUBLE    ENTRY    BOOK-KEEPING. 


307.  The  form  of  entry  we  have  observed  in  closing  Exv 
penses,  (Art.  301,)  will  apply  to  Merchandise,  Interest,  Stone 
Mill,  or  any  other  account  indicating  gain  or  loss  in  business, 
in  case  the  sum  of  the  Dr.  entries  to  it  exceeds  that  of  the  Cr. 
entries.     And  should  the  Dr.  side  of  Profit  and  Loss  exceed 
the  Cr.  side,  the  difference  will  go  to  the  Dr.  of  Stock,  and 
the  closing  entry  of  the  Journal  will  be,  Stock  Dr.,  for  loss  in 
trade,  to  Profit  and  Loss.     The  Stock  Account  will  appear 
among  the  Dr.  Ledger  Balances  whenever  one's  Liabilities 
exceed  his  Assets,  or  when  he  owes  more  than  he  possesses. 
Whatever  amount  of  property  one  actually  possesses,  above  his 
debts,  (if  any,)  will  stand  on  his  Ledger  to  the  Cr.  of  Stock, 
and  may  be  considered  as  a  positive  quantity.     But  when 
there  is  an  actual  indebtedness,  beyond  one's  ability  to  pay,  the 
amount  will  stand  on  his  Ledger  to  the  Dr.  of  Stock,  and  may 
be  regarded  as  a  negative  quantity. 

308.  In  the  Double  Entry  Ledger,  ^  as  has  already 
been  intimated,  stands  for  Journal.     The  ofo  arid  ^L,  which 
are  the  usual  signs  of  Dr.  and  Cr.  entries,  are  often  omitted 
in  the  Ledger.     When  a  Day  Book  is  used,  the  Journal 
entry  frequently  occupies  but  a  single  line,  thus  : 


In  such  cases  two  columns  are  required  at  the  left  for  post 
marks  :  the  one  at  the  extreme  left  for  the  Dr.  entries,  and  the 
other  for  the  Cr.  entries.  In  all  other  respects  the  Posting 
should  be  conducted  as  from  the  following  Journal  to  the 
Ledger.  In  the  above  Journal  entry,  S.  C.  Woodward  &  Co., 
preceding  the  word  "  to,"  are  Dr.,  and  Bills  Payable,  follow* 
ing  it  are  Cr.  (Art.  279.)  Dr.  sums  are  entered  in  the  left* 
hand  set  of  money  columns,  and  Cr.  sums  in  the  right-hand  set. 

QUEST.  307.  To  what  will  the  form  "of  entry  observed  in  closing  expenses  apply? 
When  will  Stock  be  made  Dr.  in  closing  Profit  and  Loss  ?  When  will  Stock  appear 
among  the  Dr.  Ledger  balances  ?  When  may  Stock  be  regarded  as  a  positive  qxian- 
tity,  and  when  as  a  negative  quantity  ?  —308.  In  the  Double  Entry  Ledger  what 
does  J  stand  for  ?  What  of  To  and  By  f  When  are  two  columns  required  for  post 
marks  ?  What  of  posting  in  other  respects  ?  Where  are  Dr.  and  Cr.  sums  entered  f 

184 


ILLUSTRATIVE    EXAMPLE. 


ILLUSTRATIVE  EXAMPLE. 

FOURTH  FORM   OF  ACCOUNTS. 

309.  For  the  purpose  of  illustrating  the  method  of  open- 
ing a  set  of  books,  and  the  mode  of  journalizing  and  posting 
transactions,  but  more  especially  for  the  sake  of  showing 
clearly  and  distinctly  the  method  of  closing  a  set  of  books  in 
Double  Entry,  the  following  Illustrative  Example  is  here 
introduced.  It  can  not  be  too  carefully  studied. 

Monday,  January  2d,  1860. 

Transaction  1.  I  commence  business  this  day  with  the 
following  effects :  Merchandise  in  Store,  worth,  as  per  Inven- 
tory, $4600.00;  Cash  in  safe,  $2500.00;  two  Notes,  one 
No.  3,  against  John  Otis  for  $1500.00,  and  the  other,  No.  4, 
against  Henry  Brown  for  $1200.00. 

Tr.  2.  I  owe  Hill  &  Wright  on  account  for  Mdse.  as  per 
Invoice  Book  A,  p.  8,  $1350.00,  and  Clark  &  Smith,  as  per 
Invoice  Book  A,  p.  12,  $1250.00. 

Tuesday,  January  3d,' 18  60. 

Tr.  3.  I  have  this  day  sold  Mdse.  to  S.  C.  Wood  &  Co., 
as  per  Sales  Book  A,  p.  15,  amounting  to  $2450.00. 

Thursday,  January  5th,  1860. 

Tr.  4.  James  Armitage  has  bought  Merchandise  of  me, 
on  acct.,  as  per  Sales  Book  A,  p.  20,  amounting  to  $1240.00. 

Friday,  January  §th,  1860. 

Tr.  5.  I  have  sold  Mdse.  to  several  persons,  as  per  Sales 
Book  A,  p.  25,  amounting  to  $840.00,  for  which  I  have 
received  Cash. 

QUEST.  309.  Why  is  the  Illustrative  Example  introduced  in  Double  Entry  ? 
185 


DOUBLE    ENTRY   BOOK-KEEPING. 


Monday ',  January  $th,  1860. 

Tr.  6.  I  have  bought  Mdse.  in  New  York,  as  per  Invoice 
Book  A,  p.  18,  amounting  to  $2480.00,  for  which  I  paid  the 
Cash.  My  expenses  amounted  to  $30.50,  and  I  paid  $65.50 
for  freight  on  goods  bought. 

Tuesday,  January  Wth,  1860. 

Tr.  7.  S.  C.  Wood  &  Co.  have  paid  me  $1650.00  in 
Cash,  on  account  of  Mdse.  bought  Jan.  3d. 

Thursday,  January  12th,  1860. 

Tr.  8.  I  have  bought  Mdse.  in  Boston,  as  per  Invoice 
Book  A,  p.  22,  amounting  to  $1460.00.  My  expenses 
amounted  to  $28.00,  and  the  freight  on  goods  bought  was 
$37.60 ;  all  of  which  I  have  paid  in  Cash, 

Saturday,  January  14th,  1860. 

Tr.  9.     John  Otis  has  paid  his  Note,  No.  3,  of  $1500.00. 
Tr.  10.     James  Armitage  has  bought  Mdse.  on  acct.,  as 
per  Sales  Book  A,  p.  30,  amounting  to  $820.00. 

Monday,  January  IQth,  1860. 

Tr.  11.  I  have  sold  Mdse.  for  Cash,  as  per  Sales  Book 
A,  p.  35,  amounting  to  $1248.60;  and  Henry  Brown  has 
paid  his  Note,  No.  4,  of  $1200.00. 

Wednesday,  January  ISth,  1860. 

Tr.  12.  I  have  paid  Hill  &  Wright  $750.00  on  acct., 
and  I  have  paid  Clark  &  Smith  $1250.00  in  full  of  their  acct 

Friday,  January  20th,  1860. 

Tr.  13.  S.  C.  Wood  &  Co.  have  bought  of  me  Mdse.  on 
acct.,  as  per  Sales  Book  A,  p.  40,  amounting  to  $1850.00. 

16*  186 


ILLUSTRATIVE    EXAMPLE. 


Monday,  January  23d,  1860. 

Tr.  14.  I  have  sold  Merchandise  for  Cash,  as  per  Sales 
Book  A,  p.  45,  amounting  to  $785.00. 

Saturday,  January  28th,  1860. 

Tr.  15.  I  have  paid  Hill  &  Wright's  Draft  to  M.  Drake 
for  $460  00.  I  have  also  paid  $50.00  for  one  month's  Clerk 
Hire. 

Monday,  January  30th,  1860. 

Tr.  16.  I  have  bought  Mdse.  of  Hill  &  Wright,  on  acct., 
•mounting  to  $1275.00,  as  per  Invoice  Book  A,  p.  30. 

Tr.  17.  I  have  accepted  Hill  &  Wright's  Draft  in  favor 
of  Clark  &  Smith  for  $800.00.  I  have  paid  $300.00  of  this 
sum  in  Cash,  and  the  balance  is  placed  to  the  credit  of  Clark 
&  Smith  in  account. 

Inventory  of  Mdse.  January  31st,  1860. 
310.    On  taking  an  Inventory  of  goods  remaining  on  hand 
this  day,  I  find  I  have  Merchandise  worth  $1471.00. 

Required  to  Determine  the  following  Results : 

1st.     Give  the   Trial  Balance  taken  January  30th,  1860. 

2d.  Give  the  Ledger  Balances  as  ascertained  January 
31st,  anfJ  brought  forward  under  date  of  February  1st,  1860. 

3d.  Give  the  value  of  my  Assets,  as  derived  from  these 
Transactions,  and  state  in  what  they  consist. 

4th.  Give  the  amount  of  my  Inabilities,  as  derived  from 
these  Transactions,  and  state  in  what  they  consist. 

5th.     Determine  the  Net  Value  of  my  Stock  Feb.  1,  1860. 

6th.  Has  there  been  Gain  or  Loss  in  trade  during  the 
month  of  January,  and  how  much  ? 

QUEST.  310.   What  is  the  value  of  Merchandise  on  hand,  January  31st,  as  pel 
taventory  ?    What  six  results  are  required  ? 

187 


2 


Gtfo.  3, 


?  o     / 

</a/n"   ™- 


*  Q/o 


Q/o 


.   §5 


4600 

00 

2500 

00 

2700 

00 

9*00 

06 

2600 

00 

4350 

00 

4250 

00 

2450 

00 

2450 

Oc, 

4240 

00 

4240 

0V 

$40 

00 

$40 

00 

46930 

00 

46930 

00 

Ui      Za 


,  $30.50 

aM  on         cto.  65.50 


o7&  (ffiodfon  dw 

ofioi,  e/> 
8          <^ 


on      <Jo.  37.60 


9 


^ 

10 


30     . 


189 


9600 


00 


60 


2576 


00 


4650  00 


60 


4500  00 


00 


35     . 


11  €% 


6% 


13 


&£.  fi.  40     .       . 


14 


45    . 


.fan.  2$t£.. 


15 


190 


50 


7593 


60 


0 


0 


2000  00 


5<fO 


00 


00 


00 


16 


.      .   30 


17 


jf 


-</<™" 


18  6% 


•        - 

vn  4  mo,    .       . 


in  '•T' 

e/<? 


30        €% 


NOTE.  The  last  three  of  the  above  entries,  it 
Bhould  be  borne  in  miud,  are  not  made  from 
Transactions,  like  the  seventeen  preceding  ones. 
They  arise  from  the  condition  of  UK*  Ledger. 
(Arts.  298  to  302.) 


4375 


$00  00 


244 


00 


60 


60 


4275  06 


500 


30000 


244 


6?$OO 


00 


60 


60 


INDEX  TO   LEDGER  A.  —  DOUBLE  ENTRY. 


H 


UK 


D 


LM 


NOP 


E 


QRS 


F 


a 


TUVW 


XYZ 


m 


2 


4600  00 


4275  00 


40704 


4474  00 


60 


Invt. 


2450\OO 

4240  00 

$40  OO 


424$ 


60 


4 $50  00 
7  $5  00 


1471 


40704 


00 


4$60. 

4$60. 

fan 
r 

2 

<&>/. 

/ 

2600 

00 

fen. 

2 

^?</- 

4 

9$oo 

OO 

34 

Bal. 

7878 

00 

" 

34 

" 

4 

67$ 

00 

4047$ 

00 

~ 

< 

4047$ 

00 

OH 

7$7$ 

00 

'£. 

9 

*> 

a 

96 

00 

4$60. 
fen. 

34 

4> 

4 

244 

60 

•' 

42 

// 

2 

65 

60 

/' 

" 

2$ 

" 

3 

50 

06 

244 

60 

244 

60 

4650  00 
4500  00 
60 
00 


9723  60 
00 


{$60. 


Bal. 


30000 
2812  00 

9723  60 


/an. 

34 

Bal. 

3 

4250 
500 

00 
00 

4$60. 
or 

<7 

* 

V 

4250 
5VO 

00 
00 

4750 

00 

4750 

00 

aU 

500 

00 

2450  00 
4$50\00 


430000 


2650  00 


Bal. 


4650  00 
2650  00 


194 


/an. 


2700  00 


4500  00 


2700  00 


60 


f$ 

2$ 
30 
34 


Bal. 


615 


2625 


00 


4350  00 

00 


6<f5 


00 
^0 


f 

Jtan. 

<7 

5 

*/ 

' 

4  2^0 
$20 

00 
00 

£ 

34 

Bal. 

2060 

00 

£060 

00 

2060 

00 

&«/. 

2060 

00 

1 

196 


DOUBLE    ENTRY   BOOK-KEEPING. 

_ 

TRIAL  BALANCE. 
Ans.  1st. 

Dr.                            January  30th,  1860.                              Or. 

e^c^u^  /.  / 

/^ 

40 

&OC*.                        /.    / 

$7200  00 

^.^.^foo^^o.2 

2<fj 
2$f2 
2650 

60 
00 

00 

50000 
6<f  5  00 

sf&4-  Q&imitaae,  ft.  3 

2060 

00 

^^ 

$$3*5 

00 

$$3f5  00 

\ 

LEDGER  BALANCES. 
Ans.  2d. 

Dr.                              February  1st,  1860.      .                          Or. 

e*K«t~G«  A  / 

f<47< 

00 

&0*                        /.    / 

$7  $7$  00 

cti^/,                     ft.  2 

2$f2 

00 

35/at-£<2C&<ma£,/i  2 

500  00 

^.^.7^00^^0.2 

2650 

00 

9&$ffyfayfo,fi.$ 

6*500 

<*  «*""*"" 

2060 

00 

^-^ 

$$993 

00 

$$993  oo 

Ans.  3d.       MY  ASSETS  AND   THEIR  VALUE. 

My  Assets,  February  1st,  1860,  consist  of 
1st.     Merchandise  as  per  Inventory,     $1471.00 
2d.     Cash,  as  per  Cash  Acct.,       .     .       2812.00 
3d.     S.  C.  Wood  &  Co.  owe  me  on  acct,      2650.00 

4th.    Jas.  Armitage  owes  me  On 
Total  amount  of  Assets, 

196 

acct.         2060.00 

$8993.00 

ILLUSTRATIVE    EXAMPLE. 


Amount  of  Assets  brought  up,      .     .     $8993.00 

Ans.  4th.     MY  LIABILITIES,   AND   TO   WHOM. 

1st.    I  owe  Clark  &  Smith  on  acct,          $500.00 
2d.     I  owe  Hill  &  Wright  on  acct.  615.00 

Total  amount  of  Liabilities,  .     .  ~ '.     ".  $1115.00 

Ans.  5th.     Net  Value  of  my  Stock,  Feb.  1st,  1860,  $7878.00 

Net  Value  of  my  Stock,  Jan.  2d,  1860,  7200.00 

Ans.  6th.     Net  Gain  in  trade  for  January,     .     .  $678.00 

311.  The  student  will  find  'this  Illustrative  Example 
solved  on  pp.  188  to  195,  with  a  full  explanation  of  the  whole 
procedure  in  Arts.  293  to  303.  These  may  be  freely  con- 
sulted till  the  learner  becomes  familiar  with  the  method  of 
opening,  journalizing,  and  especially  of  closing  a  set  of  books; 
but  he  should  not  pass  on  till  he  is  so  familiar  with  all  the 
principles  involved  as  to  be  able  to  explain  every  step  taken 
without  reference  to  the  book.  The  great  beauty  of  the 
science  of  Double  Entry  is  readily  apparent  in  the  work  of 
this  Example.  From  the  first  Journal  entry,  on  page  188, 
there  has  been  a  perpetual  equilibrium  of  accounts.  The 
debits  entered  from  each  transaction  have  been  exactly  equal 
to  the  credits.  The  footings  of  the  Dr.  and  Cr.  columns  of 
every  page  of  the  Journal  agree  in  amount.  The  equilibrium 
appears  again  in  the  Trial  Balance,  on  the  last  page,  and 
finally  in  the  Ledger  Balances  there  given.  In  case  the 
learner  acquires  a  thorough  mastery  of  these  principles,  and 
is  alike  thorough  with  the  following  but  more  difficult  Exam- 
ples for  Practice,  he  will  readily  become  an  accomplished 
book-keeper.  Is  not  this  result  worth  the  effort  ? 

QUEST.  311.  What  is  said  of  the  Illustrative  Example  ?  What  should  the  learner 
be  i\ble  to  do  before  he  passes  from  this  example  ?  What  is  said  of  the  beauty  of 
Double  Entry  ?  What  of  the  equilibrium  of  accounts  ?  What  will  result  from  a 
Borough  mastery  of  these  principles  ? 

17  *  197 


DOUBLE    ENTRY   BOOK-KEEPING. 


EXAMPLES  FOR  PRACTICE. 

FOURTH   FORM.  —  PARTNERSHIP. 

312.  In  PARTNERSHIP  each  Partner's  individual  dealings 
with  the  Firm  are  conducted  in  all  respects  on  the  same  basis 
as  other  personal  accounts.  Each  is  debited  for  what  he  re- 
ceives  from  the  Firm,  and  for  what  is  paid  on  his  account, 
and  credited  for  what  he  brings  to  the  Firm,  and  for  what  ia 
received  on  his  account.  (See  Arts.  199  to  201.) 

The  Opening  Journal  Entries  of  this  example  will  be  made 
on  the  same  principle  as  were  those  of  the  former  example ; 
and  they  will  be  in  amounts  as  indicated  in  the  Ledger  Bal- 
ances at  the  196th  page,  with  this  difference:  The  Cash  and 
Stock  will  each  be  $5000.00  more  than  there,  on  account  of 
Capital  brought  to  the  Firm  by  the  incoming  Partner. 

Wednesday,  February  1st,  1860. 

Transaction  1.  I  have  agreed  with  Phineas  Graves  to 
receive  him  as  a  Partner  in  a  General  Mercantile  Business, 
to  be  conducted  under  the  title  *  of  "  Mayhew  &  Graves." 
I -put  into  the  business  all  of  my  Assets,  as  given  in  Ans.  2d 
of  the  last  example,  a«d  the  Firm  assume  my  Liabilities,  as 
there  given.  (See  Ledger  Balances,  p.  196.) 

Tr.  2.  P.  Graves  brings  with  him  into  the  Firm  a  Cash 
Capital  of  $5000.00,  and  we  have  agreed  to  share  the  gain 
or  loss  in  trade  equally. 

Thursday,  February  2d,  1860. 

Tr.  3.  S.  C.  Wood  &  Co.  have  bought  Merchandise  of  t» 
on  account,  as  per  Sales  Book  B,  p.  1,  amounting  to  $140.00, 

*  Where  the  author's  name  is  employed  in  this  Example  the  student  may  substi- 
tute his  own  name,  thus  making  himself  the  senior  partner  of  the  firm  conducting 
the  business.  The  name  adopted  must  be  uniformly  employed. 

QUEST.  312.  In  Partnership  how  are  the  partners'  individual  dealings  with  the 
Firm  conducted  ?  For  what  is  each  partner  debited^  and  for  what  credited  ?  What, 
is  remarked  of  the  Opening  Journal  Entries  in  Partnership  ?  What  partnership  lia» 
been  formed,  and  with  what  capital  ?  What  is  the  title  of  the  Firm  ?  Whom  will  tfaf 
Hudent  regard  as  the  senior  partner  ? 

198 


EXAMPLES   FOR    PRACTICE. 


Tr.  4.  James  Armitage  has  paid  us  $1060.00  in  Cash, 
and  has  given  us  his  Note,  No.  1,  for  $1000.00,  payable  at 
our  Store  in  30  days,  with  interest  at  6  per  cent. 

Monday,  February  Qth,  1860. 

Tr.  5.  "We  have  bought  a  Wagon  Shop,  and  lot,  of  Henr/ 
L.  Hay  wood,  for  $900.00,  with  tools  and  stock  inventoried  a4 
$400.00.  We  give  him  in  payment  $500.00  in  Cash,  and 
our  Note,  No,  1,  for  the  balance,  at  30  days  without  interest. 

We  propose  to  keep  an  acct.  with  Waff  on  Shop.  (A.rts.  39 
and  40.) 

Tuesday,  February  7th,  1860. 

Tr.  6.  We  have  bought  Mdse.  of  S.  C.  Hooker  &  Co.  oi 
New  York,  as  per  Invoice  No.  1,  amounting  to  $2750.00. 
Our  expenses  attending  the  purchase  were  $37.40,  and  we 
paid  freight  on  goods,  $45.10.  We  gave  our  Note,  No.  2, 
to  Hooker  &  Co.,  for  $2250.00,  payable  at  the  Exchange 
Bank  in  3  months,  with  interest  at  6  per  cent,  after  30  days. 
The  balance  of  Invoice  and  our  expenses  we  paid  in  Cash. 

Saturday,  February  llth,  1860. 

Tr.  7.  John  Porter  has  bought  a  bill  of  Mdse.  of  us,  as 
per  Sales  Book  B,  p.  8,  amounting  to  SI  186.00.  Of  this  sum 
he  has  paid  $326.00  in  Cash,  and  the  balance  we  charge  him 
in  account. 

Monday,  February  13th,  1860. 

Tr,  8.  We  have  purchased  a  stock  of  Lumber  of  Henry 
King,  for  Wagon  Shop,  to  the  amount  of  $1775.60.  We 
have  paid  him  $225.60  in  Cash.  The  balance  of  the  purchase 
is  on  account. 

Wednesday,  February  15th,  1860. 

Tr.  9.  We  have  leased  of  John  Johnson  a  Stone  Flour- 
ing Mill,  worth  $12000.00,  for  five  years.  The  rent  agreed 
upon  is  10  per  cent,  per  annum  of  the  value  of  the  property 


DOUBLE    ENTRY    BOOK-KEEPING. 


at  this  time.  We  pay  3  months'  rent  in  advance ;  we  alsa 
pay  $256.00  in  Cash  for  sundry  fixtures  received  with  the 
Mill. 

We  propose  to  keep  an  account  with  Stone  MiU.  (Arts.  39 
and  40.) 

Thursday,  February  IQth,  1860. 

Tr.  10.  We  have  sold  Mdse.  to  Isaac  Newton,  on  acct, 
as  per  Sales  Book  B,  p.  16,  amounting  to  $280.50. 

Monday,  February  20th,  1860. 

Tr.  11.  We  have  bought  of  James  Bronson  1860  bushels 
of  White  Wheat  for  Stone  Mill,  at  $1.20  a  bushel,  for  which 
we  have  given  our  Note,  No.  3,  payable  in  10  days,  in  Wagons 
and  Sleighs. 

Wednesday,  February  22d,  1860. 

Tr.  12.  We  have  sold  to  John  Porter  8  Cutters,  at  $45.00 
each,  and  1  Buggy  for  $120.00,  and  charged  the  same  to  him 
in  account. 

Friday,  February  2±th,  1860. 

Tr.  13.  Ira  Mayhew  has  tnken  from  the  Wagon  Shop  a 
Cutter,  for  his  own  use,  woilh  $45.00,  and  Phineas  Graves 
has  taken  a  Sleigh,  worth  $50.00,  which  are  charged  to  them 
in  account. 

Monday,  February  27th,  1860. 

Tr.  14.  We  have  bought  $2800.00  worth  of  Mdse.  of 
Henry  Underwood,  as  per  Invoice  No.  2,  for  which  we  have 
delivered  to  him,  at  the  Stone  Mill,  300  bbls.  of  Flour,  at 
$6.00  a  barrel.  We  have  paid  him  the  balance  of  Invoice 
out  of  the  Wagon  Shop,  in  Buggies,  at  $125.00  each. 

Wednesday,  February  29th,  1860. 

Tr.  15.  We  have  purchased  of  Henry  Hathaway  901 
and  j^bush.  of  Red  Wheat  at  98  c.  a  bush,  and  650  bushels  of 
White  Wheat  at  $1.02  a  bushel,  for  use  in  the  Stone  Mill, 
i*nd  have  paid  him  for  the  same  in  Mdse. 

200 


EXAMPLES    FOR    PRACTICE. 


Thursday,  March  1st,  1860. 

Tr.  16.  Joseph  White,  who  has  purchased  of  James 
Bronson  our  Note,  No.  3,  given  Feb.  20th,  has  presented 
the  same  for  payment.  He  takes  20  Lumber  Wagons  at 
$75.00  each,  and  the  balance  of  the  Note  in  Double  Sleighs 
at  $61.00  each. 

Friday,  March  2d,  1860. 

Tr.  17.  James  Armitage  has  paid  his  Note,  No.  1,  given 
Feb.  2d,  with  interest.  (See  transaction  of  that  date.) 

We  now  open  an  acct.  with  Interest.    (See  Arts.  39  and  40.) 

Tuesday,  March  6th,  1860. 

Tr.  18.  We  have  paid  our  Note,  No.  1,  given  to  H.  L. 
Hay  wood  Feb.  6th.  He  took  on  it  130  bbls.  of  Flour  at 
$6.00  a  barrel,  and  the  balance  of  the  Note  he  received  in 
Shorts  from  the  Stone  Mill  at  $10.00  a  ton. 

Wednesday,  March  7th,  1860. 

Tr.  19.  John  Hinman  has  bought  of  us,  on  acct.,  200  bbls. 
of  Flour  at  $6.00  a  barrel,  and  8  Lumber  Wagons  at  $65.00 
each. 

Friday,  March  9th,  1860. 

Tr.  20.  We  have  sold  to  Clark  &  Smith,  on  acct.,  12 
Carriages  at  $75.00  each ;  85  bbls.  of  Flour  at  $6.00  a  bar- 
rel ;  and  20  tons  of  Ship  Stuff  at  $15.00  a  ton. 

Saturday,  March  10th,  1860. 

Tr.  21.  We  have  bought  2700  bushels  of  Wheat  at  $1.00 
a  bushel,  and  1900  bbls.  at  31  c.  each,  to  be  delivered  at  the 
Stone  Mill.  We  have  paid  the  foreman  in  the  Wagon  Shop 
$50.00  for  1  month's  services.  We  have  also  paid  $1270.00 
for  stock,  as  per  Invoice  No.  3,  for  Wagon  Shop,  all  of  which 
has  been  paid  in  Cash. 

201 


DOUBLE    ENTRY    BOOK-KEEPING. 


Monday,  March  12th,  1860. 

Tr.  22.  Hill  &  Wright  have  bought  of  us,  on  acct.,  250 
bbls.  of  Flour  at  $6.00  a  barrel,  and  5  Lumber  Wagons  at 
$65.00  each. 

Wednesday,  March  lith,  1860. 

Tr.  23.  We  have  sold  Merchandise  to  John  Paywell,  as 
per  Sales  Book  B,  p.  40,  amounting  to  $2400.00.  He  has 
also  purchased  of  us  3  Lumber  Wagons  at  $65.00  each,  for 
all  of  which  he  has  given  us  his  indorsed  Note,  No.  2,  pay- 
able at  the  Exchange  Bank  in  30  days,  with  interest  at  7 
per  cent. 

Friday,  March  IQth,  1860. 

Tr.  24.  We  have  sold  Isaac  Newton,  on  acct.,  one  Lum- 
ber Wagon  for  $60.00 ;  20  bbls.  of  Superfine  Flour  at  $6.50 
each ;  and  10  bbls.  of  Flour  at  $6.00  a  barrel. 

Monday,  March  13th,  1860. 

Tr.  25.  We  have  bought  of  Isaac  Newton,  on  acct.,  an 
assorted  stock  of  Wood  for  Wagon  Shop,  for  $265.00.  We 
have  also  bought  of  Hill  &  Wright,  on  acct.,  a  bill  of  Hard- 
ware for  Wagon  Shop,  as  per  Invoice  No.  4,  amounting 
to  $387.50. 

Tuesday,  March  20th,  1860. 

Tr.  26.  We  have  bought  Merchandise  in  New  York,  as 
per  Invoice  No.  5,  amounting  to  $2944.00.  Our  expenses 
to  New  York  were  $24.00,  and  we  paid  $27.00  for  freight 
on  goods  bought,  for  all  of  which  we  have  paid  Cash. 

Thursday,  March  22d,  1860. 

Tr.  27.  H.  King  has  presented  the  Order  of  Ira  May  hew 
at  the  Wagon  Shop,  on  which  he  has  received  one  Lumber 
Wagon  worth  $65.00. 

Tr.  28.  We  have  this  day  paid  Store  Expenses  in  Cash, 
as  follows:  for  Clerk  Hire  $75.00,  and  for  Fuel  and  Lights 
$30.00. 

302 


EXAMPLES    FOB   PRACTICE. 


Saturday,  March  2±th,  1860. 

Tr.  29.  Two  Orders  drawn  by  Phineas  Graves  for  per- 
sons in  his  private  employ,  have  been  presented  and  paid; 
one  for  Flour  and  Shorts  at  the  Stone  Mill  for  $65.00 ;  and 
the  other  for  $70.60  in  Mdse. 

Monday,  March  26th,  1860. 

Tr.  30.  We  have  sold  to  Simeon  Rice  560  bbls.  of  Flour 
from  the  Stone  Mill,  at  $6.00  a  barrel,  and  received  his 
indorsed  Note,  No.  3,  therefor,  payable  in  60  days  at  the 
Exchange  Bank,  with  interest  at  7  per  cent. 

Tr.  31.  We  have  sold  $225.00  worth  of  Mdse.  to  John 
Porter,  on  acct.,  as  per  Sales  Book  B,  p.  60,  and  25  bbls.  of 
Flour  at  $6.00  a  barrel. 

Tuesday,  March  27th,  1860. 

Tr.  32.  We  have  bought,  on  acct.,  an  assorted  stock  of 
Wood,  of  Henry  King,  for  use  at  the  Wagon  Shop,  worth 
$230.00.  John  Porter  has  completed  the  wood  work  of  8 
Buggies  at  $19.00  each,  and  Isaac  Newton  has  finished  the 
wood  work  of  10  Sleighs  at  $17.00  each,  for  which  we  credit 
them  in  acct. 

Thursday,  March  29*A,  1860. 

Tr.  33.  S.  C.  Wood  &  Co.  have  given  us  their  Note, 
No.  4,  to  balance  their  acct.  Said  Note  is  payable  at  the 
Exchange  Bank  the  1st  of  May,  and  draws  interest  from 
February  1st  at  6  per  cent,  per  annum. 

Friday,  March  30th,  1860. 

Tr.  34.  We  have  given  to  James  Armitage  an  Order  on 
the  Stone  Mill  for  25  bbls.  of  Flour  worth  $6.00  a  barrel, 
and  2  tons  of  Shorts  worth  $10.00  a  ton,  and  charged  the 
same  to  h'm  in  account. 

203 


DOUBLE    ENTRY   BOOK-KEEPING. 


313.  The  learner  having  written  up  his  Journal  to  thig 
date,  and  posted  the  same  to  the  Ledger,  should  take  a  Trial 
Balance  before  proceeding  further.  (Art.  294.)  In  case  he 
obtains  the  following  result  he  may  conclude  his  work  is  cor- 
rect, and  proceed  in  journalizing ;  otherwise  the  work  of  the 
Journal  and  Ledger  should  be  reviewed  and  corrected. 

Dr.  TRIAL  BALANCE,   MARCH  30-TH,    1860.  Or. 


/. 


ft 

' 

f* 
ft.  40 


4446 

629 


470  00 
4720  00 
4240  00 
60 


00 
440  00 
95  50 

£3$  50 
4563  00 


49606 


90 


314.  The  page  is  given,  in  the  preceding  Trial  Balance, 
to  conform  to  the  page  of  the  Ledger  as  the  example  is 
worked  in  the  Key.  The  balances  to  these  several  accounts 
will  be  the  same,  regardless  of  the  Ledger  pages  they  occupy. 
The  learner,  I  need  hardly  here  add,  has  a  right  to  feel  en- 
couraged with  his  progress  in  proportion  as  he  is  able  to 
obtain  correct  results  without  aid  from  his  teacher,  and 
without  consulting  the  Key. 

QUEST.  313.  What  is  said  in  relation  to  taking  a  Trial  Balance?  — 314.  Will  th« 
result  of  the  Trial  Balance  depend  in  any  degree  upc^n  \he  arrangement  of  account* 
iu  the  Ledger  ? 

204 


EXAMPLES    FOR   PRACTICE. 


Tuesday,  April  3d,  1860. 

Tr.  35.  S.  C.  Wood  &  Co.  have  received  from  Henry 
King  his  Draft  on  us  for  $1275.00,  which  we  accept.  We 
pay  them  $125.00  in  Cash,  furnish  them  with  a  Carriage 
from  the  Wagon  Shop  worth  $225.00,  and  place  the  balance 

of  the  Draft  to  their  credit  in  acct. 

I 

Thursday,  April  5th,  1860. 

71*  36.  Clark  &  Smith  present  an  Order  on  us  from 
Henry  King  for  $125.00,  which  we  accept.  They  deliver 
at  the  Stone  Mill,  on  acct.,  325  bushels  of  Wheat  worth  95  c. 
a  bushel.  We  settle  our  acct.  and  they  give  us  their  Note, 
No.  5,  for  balance  of  acct.,  payable  at  our  Store  in  30  days 
without  interest. 

Friday,  April  6th,  1860. 

Tr.  37.  We  sell  $2500.00  worth  of  Merchandise  to  James 
Armitage,  on  acct.,  as  per  Sales  Book  B,  p.  75. 

Monday,  April  9th,  1860. 

Tr.  38.  We  sell  to  John  Hinman,  on  acct.,  8  Lumber 
Wagons  at  $65.00  each ;  160  bbls.  of  Flour  at  $6.00  a  barrel ; 
and  $327.75  worth  of  Mdse.,  as  per  Sales  Book  D,  p.  1. 

Thursday,  April  12th,  1860. 

Tr.  39.  »We  have  bought  Barns  &  King's  Note,  No.  6, 
of  John  Hinman  for  $3000.00.  Said  Note  is  indorsed  by 
Hinman  to  us,  has  drawn  interest  from  February  1st  at  6  per 
cent.,  and  is  payable  May  21st  at  the  Exchange  Bank.  We 
credit  Hinman  in  acct.  for  the  Note,  and  allow  him  interest 
on  same  for  2  months  and  10  davs.  Hinman  this  day  fur- 
nishes us  with  Invoice,  No.  6,  of  Lumber  for  Wagon  Shop^ 
amounting  to  $254.60. 

Saturday,  April  14th,  1860. 
Tr.  40.     John  Paywell  has  this  day  taken  up  his  Note, 

18  205 


DOUBLE    ENTRY    BOOK-KEEPING. 


No.  2,  given  the  14th  of  March,  payable  at  the  Exchange 
Bank,  *  and  drawing  interest. 

Monday,  April  IQth,  1860. 

Tr.  41.  We  have  bought  Mdse.  in  Boston  of  Josiah  Wall, 
as  per  Invoice  No.  6,  amounting  to  $3400.00.  Our  expenses 
attending  the  purchase  were  $35.00,  and  we  have  paid  $23.00 
freight  on  goods  bought.  We  have  given  our  Note,  No.  4, 
for  $2500.00,  payable  in  60  days.  Our  expenses  and  the 
balance  of  Invoice  were  paid  in  Cash. 

Friday,  April  20th,  1860. 

Tr.  42.  We  have  sold  S.  C.  Wood  &  Co.  Mdse.,  on  acct,, 
as  per  Sales  Book  D,  p.  10,  amounting  to  $1125.50;  8  Bug- 
gies at  $105.00  each ;  and  60  bbls.  of  Flour  at  $6.00  a  bbl. 

Monday,  April  23d,  1860. 

Tr.  43.  James  Armitage  buys  of  us  one  Single  Wagon 
for  $125.00,  and  20  bbls.  of  Superfine  Flour  at  $6.50  a  barrel. 
He  pays  us  a  Certificate  of  Deposit  of  $2500.00  with  the 
Exchange  Bank,  where  we  keep  our  bank  account,  and  which 
we  use  as  money.  The  overplus  we  pass  to  his  credit  in  acct. 

Thursday,  April  26th,  1860. 

Tr.  44.  S.  C.  Wood  &  Co.  have  paid  us  $500.00  in  Cash, 
on  acct.,  and  have  delivered  at  the  Stone  Mill  fpr  us  800 
bushels  of  Wheat  at  $1.05  a  bushel. 

Tuesday,  May  1st,  1860. 

Tr.  45.  S.  C.  Wood  &  Co.  have  paid  their  Note,  No.  4, 
of  March  29th,  due  this  day  at  the  Exchange  Bank  with 
interest. 

*  We  keep  our  Bank  Acct.  with  the  Exchange  Bank,  and  any  moneys  paid  us  there 
•we  place  to  the  debit  of  Cash.  Notes  of  ours  falling  due  at  the  bank,  and  paid  by  th« 
bank  for  us,  we  place  to  the  credit  of  Cash,  as  though  paid  by  us  in  person. 

203 


EXAMPLES    FOR   PRACTICE. 


Thursday,  May  3d,  1860. 

Tr.  46.  James  Armitage  has  bought  Merchandise  of  us, 
on  acct.,  as  per  Sales  Book  D,  p.  25,  amounting  to  $1240.75. 

Tr.  47.  John  Hinman  has  bought  of  us,  on  acct.,  as  fol- 
lows: Mdse.  as  per  Sales  Book  D,  p.  30,  amounting  to 
$1422.00,  and  20  bbls.  of  Flour  at  $6.40  a  barrel. 

Saturday,  May  5th,  1860. 

Tr.  48.  Clark  &  Smith  have  paid  us  their  Note,  No.  5, 
given  April  5th. 

Monday,  May  1th,  1860. 

Tr.  49.  "We  have  paid  our  Note,  No.  2,  given  to  S.  C. 
Hooker  &  Co.  Feb.  7th,  and  this  day  due  at  the  Exchange 
Bank. 

Tuesday,  May  8th,  1860. 

Tr.  50.  Henry  King  has  delivered  $475.00  worth  of 
Lumber  at  the  Wagon  Shop  on  our  account,  as  per  Invoice 
No.  7.  He  presents  an  Order  on  us  from  Phineas  Graves 
for  $125.00,  $75.00  of  which  we  pay  in  Cash,  and  place  the 
balance  to  the  credit  of  King  in  acct. 

Thursday,  May  10th,  1860. 

Tr.  51.  Isaac  Newton  delivers  for  us  at  the  Stone  Mill 
603  bushels  of  Wheat  at  $1.00  a  bushel,  and  brings  an  Order 
on  us  from  Ira  Mayhew  for  $240.00,  on  which  he  receives 
$124.50  in  Cash.  He  buys  of  us  24  Lumber  Wagons  at 
$60.00  each ;  all  of  which  is  entered  in  account. 

Saturday,  May  12th,  1860. 

Tr.  52.  S.  C.  Wood  &  Co.  have  made  an  assignment,  and 
offer  to  their  creditors  60  cents  on  a  dollar.  We  settle  with 
them  on  this  basis,  and  take  an  accepted  Order  on  James 
Armitage  for  the  amount  agreed  upon,  which  we  charge  to 
Arrnitage  ir  »cct. 

207 


DOUBLE    ENTRY   BOOK-KEEPING. 


Tuesday,  May  15th,  1860. 

Tr.  53.  We  pay  3  months'  Kent  of  Stone  Mill  at  th« 
rate  named  in  the  transaction  of  February  15th. 

Friday,  May  18th,  1860. 

Tr.  54.  We  have  sold  Hill  &  Wright  Mdse.,  on  acct.,  as 
per  Sales  Book  D,  p.  36,  to  the  amount  of  $750.00,  and  25 
bbls.  of  Flour  from  the  Stone  Mill  at  $6.00  a  barrel. 

Monday,  May  21st,  1860. 

Tr.  55.  Barns  &  King  have  paid  their  Note,  No.  6, 
which  we  received  of  John  Hinman  April  12th.  (For 
amount,  time,  etc.,  see  transaction  of  that  date.) 

Wednesday,  May  23d,  1860. 

Tr.  56.  We  have  sold  our  interest  in  the  Lease  of  the 
Stone  Mill,  taken  February  15th,  with  the  fixtures  then  pur- 
chased, and  stock  in  Mill,  to  T.  Hill  for  $1680.00,  Cash. 
Hill  has  also  bought  of  us  one  Carriage  for  $185.00,  and  one 
Cutter  for  $40.00. 

Saturday,  May  2Sth,  1860. 

Tr.  57.  Simeon  Rice  has  paid  his  Note,  No.  3,  given 
March  26th,  with  interest,  as  per  transaction  of  that  date. 

Monday,  May  28th,  1860. 

Tr.  58.  We  have  settled  with  hands  employed  in  Wagon 
Shop,  and  paid  $1062.30  in  Cash  for  Labor  and  Stock  to 
date.  We  have  also  paid  $2203.25  for  Labor  and  Stock  for 
Stone  Mill  to  date.  These  sums  are  in  addition  to  amounts 
heretofore  paid  for  these  purposes. 

Tuesday,  May  2$th,  1860. 

Tr.  59.  We  have  bought  Merchandise  as  per  Invoice 
No.  8,  amounting  to  $2212.00.  Our  expenses  attending  th^ 


EXAMPLES    FOR   PRACTICE. 


purchase,  including  freight  and  insurance,  were  $32.62.  We 
gave  in  payment  our  Note,  No.  5,  to  Hatch  &  Jones,  of  New 
York,  for  $1200.00,  payable  at  the  Exchange  Bank  in  30 
days.  The  balance  of  invoice  and  expenses  we  paid  in  Cash. 

Wednesday,  May  30th,  1860. 

Tr.  60.  "We  have  attended  the  Mechanics'  Fair,  and  ex- 
hibited samples  of  Merchandise,  of  Wagons,  and  of  Flour. 
We  receive  a  Cash  premium  of  $30.00  on  Wagons,  and 
another  of  $20.00  on  Flour.  Our  expenses  in  attending  the 
Fair  have  been  $45.50.  (Profit  and  Loss.) 

Inventory  of  our  Effects,  May  31s/,  1860. 

315.  On  taking  an  Inventory  of  goods  we  find  we  have 
on  hand  Merchandise  in  Store  worth  $3587.52. 

On  taking  an  Inventory  of  Wagon  Shop,  and  Stock  in 
Shop,  we  find  they  are  together  worth  $900.00. 

Required  to  Determine  the  following  Results: 

1st.     Give  the  Trial  Balance  taken  May  30th,  1860. 

2d.  Give  the  Ledger  Balances  as  ascertained  May  31st, 
and  brought  forward  under  date  of  June  1st,  1860. 

3d.  Give  the  Value  of  our  Assets,  as  derived  from  these 
Transactions,  and  state  in  what  they  consist. 

4th.  Give  the  Amount  of  our  Liabilities,  as  derived  from 
these  Transactions,  and  state  in  what  they  consist. 

5th.     Determine  the  Net  Value  of  our  Stock,  June  1, 1860. 

6th.  Give  the  .Net  Value  of  Stock  belonging  to  each  Part- 
ner,  after  paying  his  indebtedness  to  the  Firm.  (Art.  312, 
Trs.  1  and  2,  p.  198.) 

These  several  results,  which  it  is  required  to  determine, 
and  the  calculation  for  the  6th  and  last,  are  given  on  the  two 
following  pages.  On  obtaining  them,  the  learner  has  occa- 
sion for  congratulation. 

18*  209 


DOUBLE    ENTRY    BOOK-KEEPING. 


Ans.  1st. 
Dr. 


TRIAL  BALANCE. 
May  30th,  1860. 


Or 


</ 
s^gp' 

'ofin  (yCmman 


90 
4004-6  67 
4702  05 
45 
60 
50 
35000 
$47  00 
374-  62 


340 


34037 


'tedt 
W,7£    &>ayaJ& 

& 

\    effing 

to  #£&« 


9$  69 


00 
00 


3700 

905 

25 

4575 

4  $5  5  00 


24037  49 


00 


Ans.  2d. 
Dr. 


LEDGER   BALANCES. 
June  1st,  1860. 


Or. 


J<z 


4004,6  67 
4702  05 
47$$  45 

340  60 
4722  50 

35000 

$47  00 
4563  00 

90000 


4 $4 $2  49 

3700  00 

905  00 


210 


EXAMPLES    FOR   PRACTICE. 


Ans.  3d.  The  Dr.  Ledger  Balances  on  the  opposite  page 
are  our  Assets,  and  consist  of  Merchandise,  Cash,  Wagon  Shop, 
and  Personal  Accounts,  amounting  to  $22787.49. 

Ans.  4th.  The  Cr.  Ledger  Balances,  except  Stock,  are 
our  Inabilities,  and  consist  of  Bills  Payable,  and  a  Personal 
Account  we  owe  Henry  King,  amounting  to  $4605.00. 

Ans.  5th.  The  Net  Value  of  our  Stock,  including  the 
indebtedness  of  both  Partners  to  the  Firm,  is  $18182.49. 

Ans.  6th.  Net  Value  of  Ira  Mayhew's  Stock  after  paying 
his  personal  indebtedness  to  the  Firm,  $10180.245. 

Net  Value  of  Phineas  Graves's  Stock  after  paying  his 
personal  indebtedness  to  the  Firm,  $7341.645. 

Although  the  calculation  for  determining  the  Net  Stock  of 
each  Partner  is  given  below,  still  the  learner  will  derive 
advantage  from  making  his  own  analysis,  and  reaching  the 
result  himself,  as  he  will  be  compelled  to  do  in  actual  business. 

Calculation  for  Ira  Mayhew's  Net  Stock. 
Net  value  of  our  Stock  June  1st,       ....     $18182.49 
Net  value  of  our  Stock  Feb.  1st,        ....       12878.00 


Net  Gain  to  be  divided  equally, 

Net  Gain  of  each  Partner, $2652.245 

Ira  Mayhew's  Stock  February  1st,     ....  7878.00 

Ira  Mayhew's  Assets  June  1st, $10530.245 

Deduct  his  indebtedness  to  Firm, 350.00 

Ira  Mayhew's  Net  Stock, $10180.245 

Calculation  for  Phineas  Graves's  Net  Stock. 

Stock  of  Phineas  Graves  Feb.  1st,     ....  $5000.00 

Net  Gain  of  each  Partner, 2652.245 

Phineas  Graves's  Assets  June  1st,      ....  $7652.245 

Deduct  his  indebtedness  to  Firm, 310.60 

Phineas  Graves's  Net  Stock,      ......  $734L645 

211 


G/Yofad    a?ia     ~~^WM 

No. 

Date. 

Maker's  Name. 

Indorser's  Name. 

"    3 

4$60. 

3 
36 

£& 

^^7                    X^7                   f 

&C0nt/u   cyc^O'U/azci 

&  #      /?)         / 
Jfohn   C/^acoa 

"   4 

ft 

29 

(^.^.    'Jf'coct  tftgo. 

"    5 

Qfyt. 

5 

<&&*&  £C  &na& 

oA^ane 

"   6 

m, 

' 

&3am<f    &\    e/iL>ma 

(7 

s~^A£  f              /    /7?7f  '/*/ 
(^yy&ie>4    ana    J^&sttfo 

No. 

Date. 

Payee's  Name. 

Indorser's  Name. 

oA^c.'f 

j$60. 

ofieu. 

6 

ze  &  as*™* 

*K~ 

//  j> 

" 

7 

&.<:g.9&o£e*g<&0. 

/avtt*  &ICM0* 

//    3 

" 

SO 

fameo  £$ion4on 

oA^one 

/  /    4. 

Gs£fit. 

<6 

/o^'Watf 

F          6/3 

"    5 

29 

6/Lsatcn,    £(      fon&f 
&    <7 

(S 

The  above  is  the  Bill  Book  employed  in  the  solution  of 
the  Examples  for  Practice  commencing  on  the  198th  page. 

The  most  of  the  Notes  here  entered,  were  given,  or  received, 

at  the  time  of  their  date.     But  this  is  not  the  case  with  Bill 

Receivable  No.  6,  as  will  appear  by  referring  to  the  transac- 

tion of  April  12th,  page  205.     Still,  this  entry  is  correct. 

212 

When  due. 


Where  Payable. 


Amount. 


Remarks. 


2595  00 
3360  00 
2790  00 
776  25 
3000  00 


'a*  at 

at 
at 
at 


When  due. 


Where  Payable. 


Amount. 


Remarks. 


2250 
2232 
2500 
4200 


These  entries  were  all  made  at  the  time  the  Notes  were 
severally  given,  or  received,  except  those  under  the  head  of 
"  Remarks."  Bills  Payable,  Nos.  4  and  5,  not  having  become 
due,  June  1st,  are  not  entered  as  paid.  (Art.  315.)  The 
statement  here  made  agrees  with  those  of  the  Trial  Balance 
and  Ledger  Balances  on  the  preceding  folio,  as  it  should. 

213 


DOUBLE    ENTRY   BOOK-KEEPING. 


ILLUSTRATIVE   EXAMPLE. 

FIFTH   FORM    OF   ACCOUNTS. 

316.  The  science   of  Double   Entry,  when   thoroughly 
understood,  may  be  employed  in  a  variety  of  Forms,  having 
reference  to  the  nature  of  the  business  in  which  one  is  en- 
gaged.    The  Fourth  Form,  which  may  be  used  in  almost 
any  kind  of  business,  is  particularly  adapted  to  diversified 
trading  operations,  as  applied  in  the  last  Example  for  Prac- 
tice.    (Pages  198  to  211.) 

317.  The  Fifth  Form  is  well  adapted  to  a  retail  mercan- 
tile business  in  which  the  purchases  are  few  in  number,  but 
of  large  amount,  while  the  sales  are  numerous,  but  being  in 
small  amounts  it  is  desirable  to  bring  those  of  a  week  or  a 
month  together  before  posting.     To  meet  this  necessity,  an 
extra  set  of  money  columns  is  employed  for  Crs.  to  Mdse.,, 
into  which  sales  are  carried.     But  the  entries  in  the  one  Dr. 
column,  it  will  be  seen,  are  equal  to  those  in  the  two  Cr. 
columns  taken  together.     While  this  arrangement  requires 
but  little  more  writing  than  when  books  are  kept  by  single 
entry,  it  still  exhibits  more  complete  and  satisfactory  results. 
The  example  in  the  Fifth  Form,  given  on  pp.  216  to  218, 
combines  with  the  simplicity  of  Single  Entry,  the  complete- 
ness of  results  for  which  Double  Entry  is  so  distinguished. 

318.  Cash  sales  may  be  entered  in  the  Journal  from  the 
Cash   Book   once  a  week,  or  the   receipts  of  the   Money 
Drawer  for  the  Cash  sales  of  the  day  may  be  entered  in  the 
Journal  every  evening,  and  the  amount  of  such  sales  may  be 
posted  to  the  Ledger  at  the  end  of  the  month.     The  Ledger 
being  the  same  as  in  other  Forms  of  account  it  is  not  neces- 
sary here  to  represent  it. 


QUEST.  316.  May  different  forms  be  employed  when  books  are  kept  by  double 
entry?  To  what  is  tbe  Fourth  Form  adapted?  —  317.  To  what  is  the  Fifth  Form 
adapted  ?  Explain  its  use.  What  is  said  of  the  labor  and  results  of  this  methor]  as 
eompared  with  single  entry  f  —  318.  What  is  said  of  entering  and  posting  cash  sales'. 

214 


ILLUSTKATIVE    EXAMPLE. 


319.  Where  purchases  are  small  and  frequent  an  addi- 
tional Mdse.  -Dr.  column  may  be  employed,  as  in  case  of 
sales.     This  Form  is  applicable  to  the  wants  of  Teachers, 
Professional  Men,  and  Mechanics,  as  well  as  to  Merchants. 
All  that  is  necessary  in  such  cases  is  to  say,  Tuition  Cr., 
Services  Cr.,  or  Shop  Cr.,  as  the  case  may  be,  instead  of 
saying,  as  in  this  case,  Mdse.  Cr. 

320.  When  the  learner  has  carefully  studied  the  follow- 
ing Illustrative  Example,  he  will  do  well  to  write  out  a  state- 
ment of  Assets  and  Liabilities  at  the  time  of  opening  the 
Journal,  under  its  proper  date,  together  with  a  statement  of 
the  Transactions   entered  in  the  Example,  under  their  re- 
spective dates.     This  done,  the  Illustrative  Example  here 
written  up  may  be  laid  aside,  and  the  pupil  may  reproduce 
the  Journal  from  his  own  statement  of  Assets,  Liabilities,  and 
Transactions.     Such  exercises  will  give  him  a  readiness  in 
journalizing  which  it  is  difficult  otherwise  to  attain.     Beyond 
this,  it  will  be  advantageous  for  him  to  post  his  own  Journal, 
obtain  a  Trial  Balance,  make  the  necessary  Closing  Journal 
Entries,  post  these,  and  then  determine  and  enter  the  final 
Ledger  Balances,  there  being  $2160.00  worth  of  Mdse.  on 
hand,  as  per  Inventory.     These  exercises  may  be  worked 
on  a  few  separate  sheets  ruled  by  the  pupil.     The  results 
should  agree  with  those  on  the  218th  page.     In  posting  the 
Journals  of  the  Fifth  and  Sixth  Forms,  the  separate  Crs.  to 
Mdse.  may  be  checked   (thus   V)  to  avoid  mistakes,  they 
being  together  posted  to  the  Cr.  of  Mdse.  at  the  end  of  th© 
month.     This  arrangement,  it  will  be  seen,  requires  the  post- 
ing of  but  one  entry  a  month,  to  the  Cr.  of  Mdse.,  and  still, 
although  there  may  be  fifty  sales  a  day,  the  amount  of  these 
sales  is  carried  along,  from  day  to  day,  in  the  Journal,  till  the 
aggregate  sales  of  the  month  are  posted  to  the  Ledger. 

QtiEST.  319.  When  may  a  Mdse.  Dr.  column  be  employed  ?  — To  whose  wants 
beside  Merchants  is  this  form  applicable,  and  how?  — 320.  What  statement  is  the 
learner  advised  to  prepare  concerning  the  Illustrative  Example  in  this  Form? 

215 


'         &?04fon,  SaeAC&iu,   Q$au  /^4   S8&O. 

L.  F. 

Sundries     To  Stock  .     .     . 
Merchandise      in  Store 
Cash      in  Safe  and  Bank 
Bills  Rec.  No.l,J.Brooks,B.B. 
John  Cook       Bal.  of  his  acct. 

Sund's 

Dr. 

Sund'rt 

Or. 

Mdse. 

Cr. 

2 
1 
1 
2 
2 

2 
3 
4 

3 

1 
«/ 

8 

* 

3 
3 

1 

V 

3 

V 

2700 
475 
275 
350 

450 

1 
40 
6 

125 

1 

10 
3 

15 

200 

24 

00 
00 

00 
00 

00 

80 
50 
00 

00 

12 

80 
96 

50 
00 

35 

3800 

230 
220 

15 

413 

00 

00 
00 

50 
53 

48 

125 
15 

200 
24 

30 

00 

88 

00 

35 
53 

Stock     To  Sundries  .     .     . 
"  John  Hill  on  acct. 
"Bills  Pay.  No.l,B.B. 

Mny  fah. 

John  Hill  To  Mdse.      .     . 
20  Ibs.  Sugar  (a)  9  c.  .     . 
9  Yds.  Bl'k  Cloth  fa)  $4.50 
2  Boxes  Raisins  (a)  $3.00 

Mnij  5th- 

Cash     Sales  this  week  per  C.B. 
To  Mdse.  .     .     . 

May  Rth, 

Wm.  Cook     To  Mdse.  .     . 
14  Ibs.  Putty  (a)  8  c.   .     . 
12  Yds.  Bl'k  Silkr5)90c. 
44    "      Cotton  Cloth  fa)  9  c. 

Wny  1  0/£. 

Store  Expenses 
For  Rep'rs  on  Store  per  Bill 
To  H.  Allen   .     . 

May  1  Mb. 

Cash    Sales  this  week  per  C.  B. 
To  Mdse.    .     .     . 

Mny  1  4-/A. 

John  Hill 
For  Order  to  his  Son 
To  Mdse.    .     .     . 
Mdse.  carried  forward 

216 

413 

4679 

03 

4679 

03 

1 

2&o*fon>  <£fflufoK6zy,  Q4 

^z^ 
/_ 

/; 

^ 

/<? 

tfo. 

2 

L.  F. 

Snnd's 

Dr. 

Sund's 

Cr. 

Mdse. 

Cr. 

2 

Mdse.  brought  forward 
John  Cook     To  Mdse.   .     . 
26  Yds.  Sheeting  fa)  25  c. 
12     "     Blue  Silk  fa)  75  c. 
18  Ibs.  Cru'd  Sugar  fa)  9c. 

May  19$ 

413 

6 
9 
1 

53 

50 
00 
62 

413 
17 

53 
12 

4 

V 
1 

Family  Expenses 
Sund's  for  use  at  the  house 
To  Mdse.    .     .     . 
"    Cash    .     .     . 

<( 

32 

15 

10 

00 

22 

15 

1 

V 

Cash     Sales  this  week  per  C.B. 
To  Mdse.  .     .     , 

May  9-\*tr 

227 

60 

227 

60 

3 

4 

V 

Wm.  Cook     For  his  Order 
To  Ira  Graves     . 
"   Mdse.    .     .     . 

May  2"R$ 

52 

00 

20 

00 

32 

00 

1 

V 

Cash     Sales  this  week  per  C.B. 
To  Mdse.   .     .     . 

Mny  28$ 

225 

50 

225 

50 

4 

Ira  Graves     To  Mdse.  .     . 
10  Ibs.  Cru'd  Sugar  rg)  9  c. 
4  Yds.  Cassimere^S)  $2.50 

May  Sfyhi 

10 

90 
00 

10 

90 

3 

1 

Store  Expenses 
For  1  Chandelier.     . 
To  Cash     .     .     . 

May  %lst 

8 

00 

8 

00 

4 
'l 

Ira  Graves  To  Mdse.     .     . 
8  Yds.  Cambric  fa)  9  c.  . 
10     "     Gingham  fa)  31  c. 
Total  Mdse.  Credits  for 

8 

72 
10 

3 

82 

month    

952 

62 

952 

62 

990 

62 

990 

62 

19                                217 

DOUBLE   ENTRY   BOOK-KEEPING. 


When  the  learner,  has  posted  the  Illustrative  Example 
journalized  on  pp.  216  and  217,  and  has  observed  the  direc- 
tions in  Art.  320,  (page  215,)  he  will  be  prepared  to  answer 
the  following  questions : 

1st.  What  is  the  Trial  Balance  from  this  Journal  ? 

2d.   What  are  the  final  Ledger  Balances  ? 

3d.   What  has  been  the  Net  Gain  in  business? 


Am.  1st 
Dr. 


TRIAL  BALANCE. 
May  31st,  1860. 


Or. 


/./ 
%* 

fi.a 


3 
fi.  3 


4235 
275  00 
367 
67$$ 
23  50 
45 
43 


fa.  3 

/ 


3350\00 

45735 

45  50 

5 
22000 


Am.  2d. 
Dr. 


LEDGER  BALANCES. 
June  1st,  1860. 


Or. 


275 

367 
67 


4405 


OtlM    &L4U,         ft.  3 

vp   ed/&n,fi.  3 


ft. 


t.  4 


3706 

457 

45 

220 

5 


4405 


97 
35 

50 
00 
2$ 

To 


Ans.  3d.     Net  Gain  in  business,  $356.97. 

213 


ILLUSTRATIVE    EXAMPLE. 


ILLUSTRATIVE  EXAMPLE. 

SIXTH    FORM    OF    ACCOUNTS. 

321.  In  the  Sixth  Form  the  Journal  contains  separate 
Dr.  and  Cr.  columns  for  Cash,  which  enables  us  to  combine 
the  Cash  Book  with  the  Journal.     This  Form  is  especially 
adapted  to  a  business  in  which  there  are  many  Cash  trans- 
actions, as  in  Banking  and  Exchange,  where  moneys  are  fre- 
quently received  from  depositors,  and  often  paid  to  them,  or 
on  their  checks.     All  Cash  received  or  paid  is  entered  in  the 
Gash  columns,  and  all  other  transactions  are  carried  to  the 
columns  for  Sundries.     The  titles  of  accounts  requiring  Dr. 
entries  are  written  first,  with  the  amounts  belonging  to  them 
entered  opposite,  at  the  left  hand,  in  the  Dr.  columns.     The 
Cr.  titles  are  then  written,  after  the  word  "To,"  with  the 
amounts  belonging  to  them  entered  at  the  right  hand,  in  the 
Cr.  columns.     (Arts.  279  and  308.) 

322.  At  the  close  of  each  day  a  Gash  Balance  is  entered. 
In  the  annexed  Journal  the  footings  of  the  Cash  columns, 
and  the  Balance,  are  entered  at  the  close  of  the  day  in 
italics ;  (but  by  the  book-keeper  usually  in  red  ink.)     The 
Cash  Balance  at  the  close  of  the  first  day   (June   2d)  is 
obtained  by  taking  the  sum  of  the  Cash  credits  from  the  sum 
of  the  debits  to  Cash.     After  the  first  day  Cash  Balances  are 
uniformly  obtained  by  adding  the  Cash  receipts  of  the  day  to 
the  Balance  of  the  previous  day,  and  subtracting  from  this 
sum  the  amount  of  Cash  paid  out  during  the  day.     In  obtain- 
ing the  Balance  for  June  4th,  it  should  be  observed  that  the 
two  Dr.  entries  to  Cash,  on  page  1  of  the  following  Journal, 
must  be  added  with  the  Dr.  entries,  on  page  2,  the  account 
for  that  day  having  been  commenced  on  one  page  and  con- 
tinued on  the  other.     The  Balances  thus  obtained  should  at 
all  times  exactly  equal  in  amount  the  Cash  on  hand. 

QUEST.  321.   What  does  the  Journal  contain  in  the  Sixth  Form  ?     How  are  ctvtrias 
made  in  the  Journal?  —  322.  When  and  how  are  cash  balances  obtained? 

219 


DOUBLE   ENTRY   BOOK-KEEPING. 


323.  At  the  foot  of  each  page  of  the  Journal  a  Proof  is 
obtained  by  bringing  the  Dr.  and  Cr.  Cash  footings  under 
those  of  Sundries,  and  adding  them  together.     In  case  the 
Dr.  and  Cr.    Totals  agree   in   amount    the   work    may  be 
regarded  as  right. 

324.  Journals  may  in  like  manner  be  arranged  with  six 
sets  of  money  columns,  —  three  for  Drs.  to  Mdse.,  Cash,  and 
Sundries,  and  three  for   Crs.  to  these   accounts   severally. 
The  principle  being  understood,  the  manner  of  ruling  and 
keeping  the  Journal  may  be  adapted  to  the  particular  nature 
of  one's  business  ;  and  whatever  may  be  the  number  of  money 
columns  in  the  Journal,  on  instituting  a  Proof,  as  indicated  in 
the  last  article,  the  total  amount  from  adding  the  sums  in  all 
the   Dr.  columns  of  a  page,  will  exactly  equal   that  from 
adding  the  sums  in  all  the  Cr.  columns.     (Art.  311.) 

325.  The  learner  will  do  well  to  write  out  a  statement 
of  Assets  and  Liabilities,  and  of  the  Transactions  on  which 
the  following  Illustrative  Example  is  based,  in  accordance 
with  the  suggestion  of  Art.  320.      This   Example   repre- 
sents the  business  of  a  Private  Banker  in  the  interior,  who 
receives  deposits   from   his   customers   and   furnishes   them 
Drafts  on  the  Mercantile  Bank,  which  is  located  in  a  com- 
mercial city  on  the  sea-board. 

326.  As   Cash  in  the  Sixth  Form  takes  the  place  of 
Merchandise  in  the  Fifth,  no  Inventory  will   be   required 
before   proceeding  to  close  the   Ledger.      The   daily  Cash 
Balances  of  a  Banker,  are  to  his  business  what  the  Merchan- 
dise on  the  shelves  of  the  Merchant  is  to  the  business  of  the 
latter.     When  the  Banker's  Cash  Account  is  made  up  at  the 
close  of  the  day,  his  books  should  be  in  a  condition  to  show 
the  exact  state  of  his  business. 

QUEST.  323.  How  are  Journal  Proofs  obtained  ?  —  324.  How  else  may  Journals 
be  arranged  ?  —  325.  What  statement  is  the  learner  advised  to  prepare  ?  (See  Art. 
320.)  What  does  the  Illustrative  Example  represent  ?  —  326.  What  is  said  of  the 
relations  of  Cash  and  Mdse.  ?  To  what  may  the  Cash  Balances  of  the  Banker  be 
eom  pared  ? 

220 


Q/efoott,  fane  Sot,   S8&O.                      * 

Cash. 

Dr. 

Sund's. 

Dr. 

L.F. 

Sundries    To  Stock 
For  ibllow'g  Assets 
Cash         in  Safe    . 
Mercantile  Bank 
BillsRec.     perB.B. 
S.  Wood          owes 
me  on  account 

Sund's. 

Cr. 

Cash. 

Cr. 

2500 

255 

560 
252 

00 
00 

00 
50 

3400 
2750 
450 

1600 
378 

350 
2000 

404 

00 

00 
00 

00 
75 

00 
00 

00 

1 

V 

1 

2 
2 

1 
4 
5 
4 

3 

4 
1 
3 
3 

V 
1 

3 
2 

V 
1 

V 

2 
4 
5 
1 
3 

9100 

360 
640 
600 

255 

375 
3 
560 

250 
2 

500 
475 

400 
4 

00 

00 
00 
00 

00 

00 
75 
00 

00 
50 

00 
00 

00 
00 

350 
2000 

00 

00 

Stock    To  Sundries 
To  Job  Otis  on  acct. 
"  H.  Smith"    « 
"  R.  Cook  "    « 

June  2d. 

Cash     To  O.  Rood 
Job  Otis 
To  Mercan.  Bank 
"  Exchange  .   . 
Cash     To  O.  Rood 
Cash 
To  Mercan.  Bank 
"  Exchange  .    . 
BillsRec.  No.4,B.B. 
To  Cash  .... 
Mercantile  Bank 
To  Cash  .... 
(3o^  gal.  $1217.50 

Jimp  4^A. 

2567 

500 
475 

50 

00 
00 

2350 

00 

Cash     To  S.  Wood 
Cash     To  Job  Otis 
H.  Smith 
To  Mercan.  Bank 
"  Exchange 

Cprnqf 

4542 

50 

11332 
4542 

15875 

75 
50 

25 

Sundries  .... 
f~\    -i 

13525 
2350 
15875 

25 
00 
25 

2350 

00 

Totals  

221 

19* 

Zune   4-6^  continued. 

Cash. 

r. 

Sand's. 

Dr. 

.F. 

Sund's. 

Cr. 

Cash. 

Or. 

360 

00| 

2 

Cash    To  S.Wood 

360 

00 

275 

00 

5 

Cash   To  H.  Smith 

275 

00 

479 

75 

2 

S.  Wood 

1 

To  Mercan.  Bank 

475 

00 

3 

"  Exchange     . 

4 

75 

247 

so; 

4 

Cash     To  R.  Cook 

247 

£0 

279 

75 

V 

Cash 

2 

To  Bills  Receiv- 

able, No.  3,  B.B. 

276 

00 

5 

To  Interest  .     . 

3 

75 

466 

90| 

V 

Cash  (Western)     . 

1 

To  Merean.  Bank 

460 

00 

3 

"  Exch.  14-  % 

6 

90 

375 

50 

2 

3ills  Receivable, 

No.  5,  B.  B.  .     . 

V 

To  Cash  .     .     . 

375 

50 

127 

20 

2 

S.  Wood     To  Cash 

127 

20 

L629 

"7  ^ 

Oashgal.  $3318.95 

SOS 

70 

June  5th 

2370 

00 

V 

Cash 

2 

To  Bills  Receiv- 

able, No.  2,  B.B. 

2290 

00 

5 

To  Interest  .     . 

80 

00 

2500 

00 

1 

Mercantile  Bank 

V 

To  Cash  .     .     . 

2500 

00 

384 

00 

4 

Cash     To  Job  Otis 

384 

00 

265 

88 

3 

Cash     To  O.  Rood 

265 

88 

461 

57 

3 

O.  Rood 

1 

To  Mercan.  Bank 

457 

00 

1 

3 

"  Exchange     . 

4 

57 

! 

300 

0( 

V 

Cash 

j 

2 

To  Mercan.Bank 

175 

00 

3 

"   Exchange     . 

1 

75 

2 

«    S.Wood       . 

123 

25 

4949 

03 

3944 

02 

Sundries  .     .     . 

5890 

35 

3002 

7G 

4949 

03 

Cash    .... 

3002 

VO 

8893 

05 

Totals.     .     .     • 

8893 

05 

222 

SIXTH    FORM    OP   ACCOUNTS. 


"When  the  learner  has  posted  the  Illustrative  Example 
journalized  on  pp.  221  and  222,  he  will  be  prepared  to  answer 
the  following  questions : 

1st.  What  is  the  Trial  Balance  from  this  Journal  ? 

2d.   What  are  the  final  Ledger  Balances  ? 

3d.    What  has  been  the  Net  Gain  in  business  ? 


Ans.  1st. 
Dr. 


Cash  Balance 


TRIAL  BALANCE. 
June  5th,  1860. 


530$ 
909 


7370 


40430 


03 


Or. 


fi.3 

ft.  3 


/>.  5 
fi.5 


7500  00 


50 


$47 


$375 


40430 


03 


Ans.  2d. 
Dr. 


LEDGER  BALANCES. 
June  1th,  1860. 


Or. 


7.  Wood, 

Cash 


530$ 

909 

73 

4133 


40430 


03 


ft.  3 
/i.  4 
ft.  4 
fr.  5 


7644 
649 


$47  50 


544 


40430 


97 
34 


00 

~03 


Ans.  3d.    Net  Gain  in  business,  $111.97. 

223 


BOOK-KEEPING. 


OPENING  AND  CLOSING. 

327.  The  first  difficulty  which  the  inexperienced  book* 
keeper  has  to  encounter  consists  in  Opening  the  Journal  so 
as  to  make  the  several  accounts    involved   conform  to  the 
existing  facts  at  the  time  of  commencing  a  business.     This 
done,  the    current   entries    required   in    recording    ordinary 
business    transactions    are    comparatively   easy,    and    have 
already  been  sufficiently  elucidated.     His  second  and  prin- 
cipal difficulty,  however,  consists  in  Closing  the  Ledger  —  a 
process  by  which  all  accounts  that  indicate  gain  or  loss  *  in 
trade  are  eliminated  from  the  Ledger,  and   by  which  the 
results  of  the  business,  however  complex  it  may  have  been, 
are  exhibited  in  Ledger  Balances.     Of  these  the  Dr.  exhibit 
Assets,  and  the  Cr.  Net  Stock  and  Liabilities.     (Arts.  304, 
309,  and  311.) 

EXAMPLES  FOR  PRACTICE. 

328.  For  the  purpose  of  increasing  the  familiarity  of  the 
learner  with  the  more  difficult  work  of  Opening  and  Closing 
sets  of  books  in  conformity  with  the  varied  cases  that  may 
arise,  the  following  additional  Examples  for  Practice  are  here 
introduced. 

EXAMPLE  I.       OPENING. 

329.  I  enter  upon  a  Grocery  Business,  with  the  following 
Assets  and  Liabilities,  and   open   my  books  with  a  S^ock 
Account. 

ASSETS.  I  bring  into  trade  100  bbls.  of  Sugar,  weighing 
200  Ibs.  each,  and  5  hhds.  of  Molasses,  containing  63  gallons 
each.  The  sugar  stands  me  in  5£  c.  per  lb.,  and  the  moiasses 
27£  c.  per  gallon.  All  other  Merchandise  I  bring  into  trade 
is  together  worth,  per  Inventory,  $21,375.50.  I  hold  Benja- 

QUEST.  327.  What  is  said  of  Opening  the  Journal  ?  What  is  remarked  of  current 
entries  in  ordinary  business?  In  what  does  the  second  and  principal  difficulty  of  the 
book-keeper  consist?— 328.  For  what  are  additional  Examples  for  Practice  intro- 
duced ?—  329.  What  is  stated  in  Art.  329?  Give  the  Journal  entry  required  by  my 
Assets.  Give  the  entry  for  my  Liabilities. 

224 


TRIAL    BALANCE. 


min  Butler's  accepted  Sight  Draft,  in  my  favor,  on  Henry 
Paywell,  for  $2000.00,  and  a  Note  of  Hand  against  0.  H 
Bradbury  for  $1200.00  due  in  30  days.  I  have  also  $1500.00 
in  Cash,  all  of  which  I  put  into  the  business. 

LIABILITIES.  There  is  outstanding  against  me  an  accepted 
Draft  made  by  Sam.  Brown,  in  favor  of  John  Hunter,  for 
$475.37,  payable  10  days  after  sight,  and  my  Note  given  to 
J.  O.  Baker,  or  order,  for  $1500.00,  payable  in  60  days.  I 
ani  also  indebted  in  the  sum  of  $255.75  to  Byron  Howard  on 
book  account. 

Required  to  determine  the  following  Particulars  : 

1st.  The  Journal  entry  for  my  Assets. 

2d.    The  Journal  entry  for  my  Liabilities. 

3d.   The  Net  Value  of  my  Stock  in  trade. 

EXAMPLE  II.       CLOSING. 

330.  The  business  presented  in  the  last  Example  (Art. 
329)  is  conducted  for  the  period  of  one  year,  during  which 
time  I  buy  and  sell  Merchandise,  receive  Moneys  on  Bills  due 
me,  pay  Bills  maturing  against  me,  and  deal  in  Real  Estate. 
At  the  expiration  of  the  year  I  take  a  Trial  Balance,  and  an 
Inventory  of  Merchandise  and  Real  Estate  on  hand,  with 
the  following  results : 
Dr.  TRIAL  BALANCE.  Cr. 


3750 
3450 


4526  30 
573 

$4 
753\55 


fa 


32507\$3 


3600 


260  60 
$25  50 

4090 

250$0 


32597 


QCEST.  330.  What  is  stated  in  Art.  330,  and  what  is  required? 
225 


BOOK-KEEPING. 


INVENTORY.  On  taking  an  Inventory  I  find  I  have  on 
hand  Merchandise  worth  $11,376.80,  and  Real  Estate  worth 
$22,000.00. 

1st.  Required  to  eliminate  from  the  Ledger  all  accounts 
indicating  Gain  or  Loss  in  trade,  and  to  present  in  their 
modified  condition  the  final  Ledger  Balances.  Of  these  the 
Drs.  exhibit  Assets,  and  the  Crs.  Net  Stock  and  Liabilities. 
(Acts.  298  to  307.) 

2d.    Required  the  Net  Gain  in  trade  for  one  year. 

Ans.  1. 
Dr. 


LEDGER  BALANCES. 


Or. 


<y&.    Q/c>, 


3750 
3.450 

22000 
573 

4f376 


44450 


50 


3600 
4460  50 
4090 
35000 


44450  50 


Ans.  2.     Net  Gain  in  trade  $9919.52. 

EXAMPLE    III.       OPENING. 

Partnership  without  Stock  Account. 

331.  I  associate  with  me  Hiram  Boomer,  and  continue 
the  business  of  the  last  Example,  under  the  style  and  title 
of  "  Mayhew  &  Boomer."  *  I  put  into  the  business  my  Assets, 
as  they  appear  in  the  above  Ledger  Balances,  with  the 
•exception  of  my  Real  Estate,  the  firm  assuming  my  Liabili- 
ties; and  Boomer  brings  in  $12,500.00  in  Cash,  and  $5500.00 
in  Merchandise.  We  are  each  to  keep  $15,000.00  in  the 
business,  as  nearly  as  may  be,  and  are  entitled  to  receive 

*  See  marginal  reference  on  pa 


QUEST.  331.  Give  the  Journal  entry  required  by  Art.  331. 
226 


TRIAL    BALANCE. 


interest  on  the  excess  of  our  credits  above  this  sum,  and 
are  each  to  allow  the  firm  a  like  rate  of  interest  for  what  our 
credits  shall  fall  short  of  this  sum,  in  case  they  fail  to  equal 
it.  After  interest  to  the  partners  has  been  entered,  we  are  to 
Bliare  equally  in  the  proceeds  of  the  business.  We  open  the 
books  without  a  Stock  account,  the  amount  each  partner  has 
in  trade  being  put  to  his  Cr.  in  personal  account. 
Required  the  Opening  Journal  Entry. 

EXAMPLE    IV.       CLOSING. 

Partnership  without  Stock  Account. 

332.  We  continue  the  business  introduced  in  the  last 
Example  for  one  year,  when  we  take  a  Trial  Balance  and  an 
Inventory,  with  the  following  results : 


Dr. 


TRIAL   BALANCE. 


Cr. 


50 


2$  7  5 
55 

To 


cTLi 


<f3000 


4600 
275 


INVENTORY.  We  have  Merchandise  worth,  per  Inventory, 
$15,373.00.  Each  partner's  credits  have  remained  un- 
changed. 

1st,  Required  the  Journal  entries  for  Interest  to  the 
partners. 

2d.    Has  there  been  Gain  or  Loss,  in  trade,  and  how  much  ? 

3d.  What  sum  stands  to  the  Cr.  of  each  partner  on  closing 
the  Ledger  Accounts  ? 


332.  Explain  the  process  of  closing  required  in  Art.  332. 

227 


BOOK-KEEPING. 


4th.    What  has  been  each  partner's  Gain  or  Loss  in  trade  ? 

Ans.  2.    There  has  been  a  Gain  in  trade  of  $2488.50. 

Ans.  3.  Ira  May-he w's  Cr.  $14,044.25.  H.  Boomer's  Cr. 
$19,544.25. 

Ans.  4.  Ira  Mayhew's  Gain  $1044.25.  H.  Boomer's 
Gain  $1544.25. 

IMPORTANCE  OF  THIS  SCIENCE. 

333.  The  student  has  seen  that  this  work,  which  com- 
mences with  the  simplest  elements  of  Book-keeping,  in  its 
progress  gradually  unfolds,  illustrates,  and  applies,  principles, 
the  observance  of  which  will  enable  practical  accountants 
and  business  men  systematically  to  record  all  kinds  of  mer- 
cantile and  commercial  transactions,  so  as  to  exhibit  the  results 
of  each  branch  of  a  business,  however  varied  and  complex  it 
may  be,  and  so  to  keep  their  accounts,  and  take  and  enter 
their  ledger  balances,  (monthly,  or  oftener,  as  their  business 
shall  require,)  as  to  feel  constantly  assured  that  their  books 
are  free  from  errors,  and  to  know  at  all  times  the  exact  state 
of  their  affairs.  When  one  can  thus  see,  at  a  glance,  the 
source  and  amount  of  all  gains  and  losses  arising  in  his  busi- 
ness, there  is  distinctly  indicated  to  him  what  changes,  if  any, 
should  be  made  in  order  to  render  it  more  safe  and  pros- 
perous. This  science,  it  will  hence  be  seen,  while  valuable 
as  a  school  study  for  discipline,  is  at  the  same  time  eminently 
worthy  of  the  most  careful  consideration  of  practical  men 
who  would  entertain  reasonable  hopes  of  success  in  business. 

QUEST.  333.  What  is  said  of  the  importance  of  Book-keeping  as  a  study? 

NOTE.  In  Transaction  73,  at  the  118th  page,  the  Wool  bought  for  Isaac  Hil) 
weighed,  as  purchased  in  small  lots,  7292  Ibs. ;  but  when  weighed  out  and  accounted 
for,  there  was  altogether  only  7281  Ibs.  Commission,  in  such  cases,  is  allowed  onljf 
ftn  the  amount  as  weighed  out  when  shipped. 


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UNIVERSITY  OF  CALIFORNIA,  BERKELEY 

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